17 hours Ago By Cameron Micallef
Australia’s sharemarket has been smashed for a second day running, following the worst day on Wall Street since the Covid pandemic off the back of the Trump tariff announcement. The local ASX 200 was not immune to the global sell-off as about $50bn was wiped as the market dropped 137.50 points or 1.
75 per cent to 7,722.20 points during early trading. In the US, all three indexes had their worst day since 2020.
The Dow and S&P500 dropped 4 and 4.8 per cent respectively while the tech-heavy Nasdaq Composite plunged 6 per cent. The S&P 500 fell back into a correction on Thursday, as it is now down more than 10 per cent from its February all-time high.
IG market analyst Tony Sycamore said the global market sell-off came off the back fears US President Donald Trump’s tariff policy, dubbed Liberation Day, could lead to a recession. “A staggering $2.4 trillion was erased from the value of the S&P 500 companies, the heaviest drop since the dark days of the Covid crash, he said.
“Overnight, JPMorgan revised higher to 60 per cent the chance of a global recession this year, up from 40 per cent. “As we have consistently noted this week, US equity markets are priced for a modest slowdown in growth and earnings but not for a recession. Should a recession occur in the US, US stock markets could easily fall a total of 30 per cent from their February highs.
” Capital.com senior financial market analyst Kyle Rodda said global markets cratered overnight as the fallout from the Trump tariffs continue. “Market participants see the tariffs as little more than economic vandalism and self-harm, with the higher than expected aggregate level of tariffs and the uncertainty generated by a hawkish and wanton approach to global trade raising fears of a US recession.
” The global market is continuing its sell off after US President Donald Trump said all countries will face a baseline 10 per cent tariff with around 60 nations also facing reciprocal tariffs. So far Australia has a 10 per cent tariff but our largest trading partner China, was slapped with another 34 per cent in tariffs, taking the total to 64 per cent while the European Union and Japan will have a 20 and 24 per cent tariff respectively. Prime Minister Anthony Albanese said tariffs placed on Australia are unfair.
The US President singled out Aussie beef producers, saying Australia had an unfair advantage. “Australia bans – and they’re wonderful people, and wonderful everything – but they ban American beef,” President Trump said. “Yet we imported $3bn of Australian beef from them just last year alone.
“They won’t take any of our beef. They don’t want it because they don’t want it to affect their farmers. And you know, I don’t blame them, but we’re doing the same thing right now starting at midnight tonight.
Mr Rodda said the market was hoping for clarity after the US President’s tariff plan. “Instead, it compounded it as the markets came to expect greater protectionist policy from the Trump administration,” he said. “President Trump dismissed the market reaction to his tariffs, saying it was going “very well”, while suggesting a “phenomenal” deal would need to be done to lower them.
Members of his administration also threatened aggressive counter tariffs to any retaliatory tariffs from trading partners, which are all but certain to arrive in some form.” VanEck Asia Pacific managing director and chief executive Arian Neiron agreed there has been a seismic shift to global trade. “Uncertainty will most likely prevail in the near term, and Australia is not immune, with the federal government being put to vote in the coming quarter and interest rates appearing to be stuck in a holding pattern,” Mr Nerion said.
“One thing investors can be sure of is the fundamental principle for navigating uncertainty, which is diversification. “In this environment, we think there are distinct opportunities for diversification into the under-owned, unloved corners of the capital markets.”.
