Australian shares post biggest loss in five years | Australian Markets

Australian shares have plunged to their biggest loss in five years, with more than $100 billion wiped from stock values amid widening fears that Donald Trump’s tariffs will drag the world into recession.

The S&P-ASX200 pared back a wild 6.14 per cent fall on opening on Monday to complete 4.23 per cent down at 7343.3 factors – its worst drop since falling 5 per cent on May 1, 2020.

The decline takes the barometer’s losses since Thursday to eight per cent. For 2025 to date, it’s off 10 per cent.

The severity of the sudden downturn, which has hit the superannuation financial savings of hundreds of thousands of Australians, underscores the growing issues in regards to the influence of the US President’s “reciprocal” and expansive tariffs on about 90 trading companions.

The turmoil in financial markets has worsened since China on Friday introduced retaliatory tariffs forward of the US levies coming into drive on Wednesday, raising the percentages of a international trade battle that’s seen probably pushing the US into a recession.

“What we are seeing here is the impact of a series of bad decisions taken about tariffs,” Federal Treasurer Jim Chalmers mentioned on Monday because the ASX spiralled downwards.

“But we are better placed, we are better prepared and Australians should take comfort from that,” he mentioned.

Stock markets throughout Asia traded in a sea of pink on Monday, with Hong Kong’s recording its biggest loss in 17 years, nosediving as a lot as 13 per cent. The MSCI Asia Pacific index, arguably the area’s most watched gauge of Asian shares, fell as a lot as 8 per cent.

Just 10 of Australia’s top-200 stocks gained ground as all 11 index sectors completed in the pink, with power, banking and mining shares main the losses.

The casualties included Australia’s biggest and most generally held stocks, Commonwealth Bank and BHP, which every misplaced practically 6 per cent.

Chris Ellison’s already battered Mineral Resources was the ASX200’s biggest loser, dropping 12 per cent.

The market carnage comes after US benchmark the S&P 500 crashed 6 per cent fall on Friday to steer the biggest two days of losses by main US equity markets because the peak of COVID-19 in 2020.

The S&P-ASX200 started Monday already in so-called correction territory, having misplaced over 10 per cent since February’s document high and Mr Trump’s pursuit of tariffs as half of a plan to remake the worldwide financial order in favour of the US.

The coverage has shredded stocks. As of Monday, the S&P 500 is dangerously close to coming into a bear market, down 17.5 per cent since its peak in mid-February, whereas the tech-heavy NASDAQ 100 is already there after Friday’s 6.1 per cent drop.

The Australian greenback is already collateral injury, falling underneath $US60¢ to a recent five-year low after starting weekend trading by falling from close to $U63¢.

Despite growing strain for him to pause or rethink the tariffs, Mr Trump reiterated on Sunday that he would push forward, regardless of the injury.

“I don’t want anything to go down, but sometimes you have to take medicine to fix something — and we have been treated so badly by other countries,” he mentioned.

However, one of his highest-profile backers, US billionaire investor Bill Ackman, has urged a rethink, warning of a self-inflicted “economic nuclear winter”.

“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner,” Mr Ackman wrote on social media platform X.

“Business is a confidence game. The president is losing the confidence of business leaders around the globe,” Ackman mentioned.

“The consequences for our country and the millions of our citizens who have supported the president — in particular low-income consumers who are already under a huge amount of economic stress — are going to be severely negative. This is not what we voted for.”

Mr Ackman urged Mr Trump to call “a timeout” to allow negotiations to resolve any “unfair” tariff offers.

“Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down,” he mentioned.

Pepperstone head of analysis Chris Weston mentioned Mr Trump and his Treasury Secretary Scott Bessent are enjoying a harmful recreation, “especially when equity and corporate credit reflect increasing recession and default risk – relief to one’s debt serviceability matters little if you’ve lost your job”.

“Clearly, the longer the current tariff rates remain in place the greater the impact on inflation, and deterioration in business confidence and subsequently the higher the probability that Trump’s tariff policy will be seen as responsible for causing a US and possibly global recession,” Mr Weston mentioned.

“While we’ve seen a number of (exporting) nations making moves to have their tariff rate taken down, the market is far more sensitive to news and moves that involve China, Europe, the UK and Japan,” he mentioned.

The ASX’s biggest losers included stocks uncovered to the US, resembling buy now, pay later group Zip Co, which surrendered 8.4 per cent, or these with huge US gross sales however offshore factories going through the tariff hikes, like equipment maker Breville, which misplaced more than 10 per cent earlier than a fast rebound to close 4.4 per cent decrease.

Energy stocks have been hit by the sharp retreat in oil costs as markets fear that much less of the commodity might be used in a slowing international economic system.

Having been hammered final week, Woodside Energy misplaced 5.6 in Monday trading and Santos 9.5 per cent.