The sea of red continues on the Australian Securities Exchange (ASX), further extending the billions already wiped off the bourse following US President Donald Trump’s ‘Liberation Day’, which has now been dubbed ‘Obliteration Day’.
The S&P/ASX 200 had tumbled a further 5.91%, or 453.2 points, to 7,214.6 points by 10.30am (AEST) to start the week. The index has now lost 9.61% over the past five days and is 7.19% worse off over the past year.
ANZ Economics and Research FX Analyst Felix Ryan says the tariff driven downward spiral in equities continued after China said it would impose a 34% tariff on imports of US goods, starting 10 April.
“The biggest threat to the global goods trading system since World War II is forcing a rapid deleveraging in risk assets and escalation in recession risks,” Ryan says.
“Deleveraging also means lower growth. It is difficult to see where this self-reinforcing downward spiral will end unless some space is created for negotiation in coming days.”
The ANZ China Commodity Index dropped 2.8%, with bulks the only sector to make advances.
Copper fell below US$9,000 ($14,997) a tonne, with the market feeling the pinch of China’s retaliatory tariff announcement.
“The metal is typically a bellwether of the base metal market’s expectations of industrial activity,” Ryan notes.
“The selloff was exacerbated by China’s announcement that it would retaliate to Trump’s reciprocal tariffs with a 34% levy on all imports from the US starting 10 April.
“The market had been more focused on bullish supply side issues. The move to urgently move copper into the US ahead of expected sectoral tariffs had created dislocations across the market.”
Even gold was not immune from the fallout, retreating back below US$3,000 an ounce.
All 11 sectors were in the red just after the opening bell today. The materials sector on the S&P/ASX 200 took the biggest beating, retreating 4.35% followed by utilities with a 2.95% loss. Industrials fell 1.5% and energy slipped 0.79%.
Gains were few and far between for stocks, with Lynas Rare Earths (ASX:LYC) managing to muster a 0.55% tick up to $7.35 in early trade.
However, Capstone Copper (ASX:CSC) lost 13.86% to trade at $6.03, uranium producer Paladin Energy (ASX:PDN) wiped off 11.6% to $4.04 and fellow uranium explorer Deep Yellow (ASX:DYL) slid 11.2% to $0.81.
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 & Unsplash
