The Australian share market plunged by 6.4 per cent during the first 10 minutes of trading on Monday, amounting to a $178 billion loss. This was the worst start to a session since the Covid pandemic five years ago. The market turmoil was triggered by President Donald Trump’s broad-based tariffs, which have heightened fears of a global recession.
Key banking, tech, and mining stocks suffered significant falls. Commonwealth Bank and mining giant BHP both plunged at market opening, reflecting the immediate impact of Trump’s tariffs. The benchmark S&P/ASX200 dived to 7,113 points, worse than the futures market prediction of a 5.11 per cent drop.
Though the market moderated losses later, closing down 4.23 per cent or about $119 billion, the initial shock set a grim tone.
Tariffs trigger Australian market turbulence
In the tech sector, Life360 saw a 10.99 per cent plunge in early trade to $16.10, while ZipCo, Australia’s best performing stock in 2024, fell by 12.45 per cent to $1.12.
The Australian dollar also fell below 60 US cents for the first time since March 2020, raising concerns over higher import costs and signaling a perilous global investment sentiment. Michael McCarthy, the chief commercial officer and market strategist at Moomoo, indicated the severity of the situation, stating, “The Aussie dollar is signaling we are in crisis mode already.” The currency’s decline is reminiscent of the aftermath of the Lehman Brothers collapse in 2008. New American tariffs, including 34 per cent on China and 10 per cent on Australia, have exacerbated fears of a global recession and revived concerns of 1970s-style stagflation.
McCarthy warned that financial markets now regard a global recession as a one-in-two chance, and if the US and China economies are under pressure, it’s inevitable that the Australian economy will also be affected. Australia’s Treasury officials predict the 10 per cent tariffs on Australian exports to the US will hurt several sectors, particularly beef exporters, as global trade wars intensify. The report stated, “The effects on the Australian economy are expected to be modestly adverse; however, some parts of the agriculture, energy, mining, and durable manufacturing sectors will be more affected.”
As markets brace for further turmoil, investors are particularly wary of growth-exposed stocks, including tech and mineral stocks, which are expected to be under severe pressure.
Gold also fell from record high levels of $US3,155, leaving no segment of the Australian share market unscathed.
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