The Australian Securities Exchange (ASX) lost a further $85 billion on Monday (7 April), with more volatility ahead and a much greater risk of recession.
The S&P/ASX 200 slid a further 324.5 points, or 4.23%, to 7,343.3 points, setting a new 100-day low to end the first trading session of the week.
The index has dropped 8% in the past five days and is 5.53% lower over the past year.
This comes on the back of China’s response to US President Donald Trump’s higher-than-expected tariffs on goods exported from the Asian behemoth to the US. China is implementing a retaliatory tariff of 34% on all US imports into the country.
Not one single sector escaped the blood bath. Energy led the decline with a 6.67% retreat, materials took a 4.71% hit and industrials slumped 2.55%.
Indicating the future prospects of volatility, the S&P/ASX 200 Volatility Index (A-VIX) shot up 49.2% today to 26.91 points, setting a new 100-day high.
The index has gained 130.85% in the past five days and is currently 0.92% off its 52-week high.
Also known as the ‘fear’ index, the A-VIX is a real-time volatility index that provides an insight into investor sentiment and expected levels of market volatility.
Mineral Resources (ASX:MIN) was hammered to a five-year low, dropping 11.77% to $16.72 by the closing bell. Uranium miners Deep Yellow (ASX:DYL) and Paladin Energy (ASX:PDN) tumbled 11.48% to $0.81 and 9.63% to $4.13, respectively. Oil and gas major Santos (ASX:STO) fell 9.75% to $5.37 as crude oil prices continue to fall.
Ironically, the ASX’s (ASX:ASX) own share price rallied nearly 2% to $64.69, placing it among the top movers for the day.
Lynas Rare Earths (ASX:LYC), meanwhile, extended its early gains to 3.15% to end the session at $7.54.
Gavin Wendt, resource analyst and founder of MineLife, says markets face a really tough pathway ahead in the near term.
“Markets are being hit by a double-whammy at present – the potential impacts of the tariffs themselves as they are currently presented, plus uncertainty as to what Trump might do next, given his erratic nature,” he tells Mining.com.au.
“Are these tariffs just a bargaining chip, is he prepared to negotiate? We just don’t know.”
While markets were already grappling with the prospect of recession even as Trump took power in January, Wendt believes last week’s events have only served to increase that chance to over 60%.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
