The Australian sharemarket lost nearly $60bn in early trading on Friday, as concerns about Donald Trump’s unsettling policy shifts and deteriorating trade relations between the world’s two biggest economies take hold.
The benchmark S&P/ASX 200 lost more than half its gains from the previous day after a sell-off on Wall Street overnight, falling almost 2.4% to an early low of 7,524 points, before recovering some ground.
Investors have had to contend with wild swings this week triggered by changes to the US tariff regime, with share prices pushed around by extreme bouts of relief and fear.
While some nations have enjoyed a reprieve from their supersized tariffs, Australia’s position, along with that of the UK and New Zealand, is unchanged given it remains subject to the US “baseline” 10% charge.
The White House clarified overnight that total tariffs on China had been raised to 145% since Trump took office.
Health technology company CSL has lost more than $6bn from its market capitalisation on Friday, days after Trump threatened to remove tariff exemptions for Australian pharmaceutical products.
Gas producers Woodside, Santos and Beach Energy slid more than 4%, while all four major banks lost more than 3% from their share price.
Trade war concerns have weighed on miners Rio Tinto, BHP and Mineral Resources, each facing losses on but not falling as far as the lows plumbed earlier this week.
Gold miners, though, have continued to recover value and were among the biggest winners on Friday morning. Australia’s gold exports have so far been exempted from US tariffs.
A slump on Friday caps a volatile week for traders after losses on overseas markets as investors came to terms with the worsening trade war between the US and China, according to the Westpac analyst Mantas Vanagas.
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“The relief rally following a 90-day pause on higher US tariffs was replaced by a realisation that the current US trade policy with a 145% tariff on China is still going to weaken the US economy significantly,” he said.
The Reserve Bank of Australia governor, Michele Bullock, said on Thursday night an uncertain and rocky path lay ahead and that “financial market and economic volatility can be expected as this process unfolds”.
Markets continue to expect the RBA to cut rates at each of the next four meetings, though Bullock gave no indication the bank was in a rush to ease rates.
The Australian dollar has recovered significant ground in recent days, holding above US62c on Friday morning after threatening to plunge below the 59c barrier earlier this week.
