The Australian share market plummeted on Tuesday, shedding over $45 billion after US markets tanked overnight on recession fears. The benchmark S&P/ASX200 dropped more than 140 points, or about 1.79%, to 7820.1 points. The broader All Ordinaries index was down about 1.9%, or 156.4 points, to 8035.3 points.
Investor uncertainty has been exacerbated by US President Donald Trump’s fluctuating tariff talks and the unpredictability of a potential trade war. On Sunday, Trump could not confirm if his protectionist policies could lead the US into a recession, causing shockwaves through global markets. Steven Daghlian, a CommSec market analyst, said, “The market’s reacting at the moment to several factors, but things like concerns about Trump’s tariffs could trigger an economic slowdown.
The unpredictability of the trade war really weighed on markets last week.
On Wall Street, the S&P500 lost 155.21 points (2.69%), the Nasdaq Composite lost 726.01 points (3.99%), and the Dow Jones Industrial Average fell 890.63 points (2.08%). The tech sell-off impacted major stocks like Amazon, Apple, Meta, Google, Microsoft, Nvidia, and Tesla, all down more than 5%. All 11 sectors on the Australian bourse were in the red, led by IT stocks, which fell 4.9%.
Australian market reacts to global turmoil
The resource sector and financials dropped 2.0% and 1.7%, respectively. Consumer discretionary stocks fell more than 2%, while industrials, real estate, and healthcare stocks were down more than 1% by midday.
The Australian share market has slumped about 8.1% from its all-time high of 8615 on 14 February. Daghlian noted, “Yes, we’re down heavily, but this is after record highs just weeks ago.”
Analysts are warning that more choppiness is ahead for the Australian sharemarket. Jessica Amir, market strategist at Moomoo, said, “I don’t think we’re at the bottom yet … there’s more pain ahead.” IG Markets analyst Tony Sycamore added that any relief rally off the current lows could prove short-lived.
The fresh bout of uncertainty in global markets came after Trump suggested that the American economy is set to slow. On Wednesday, the US will impose 25% duties on all steel and aluminum imports, including from allies such as Australia and Japan. Despite the sell-down, data showed that Australia’s consumer confidence picked up in March as inflation pressures eased, leading the Reserve Bank to cut interest rates for the first time in four years last month.
According to a Westpac survey, sentiment jumped 4% to 95.9 points, the highest level in three years.
