Australian share market sheds $160bn on opening as US trade war gloom spreads across globe

The ASX 200 has shed more than 6%. The Australian dollar has also fallen to trade below 60 US cents. Photograph: Bianca de Marchi/AAP

More than $160bn has been wiped off the Australian share market, as fears of a full-blown trade war grip investors.

The benchmark S&P/ASX 200 sank more than 6% to trade below the 7,200 point mark within minutes of the market opening on Monday, sending it back to levels not seen since late 2023.

The huge price falls are diminishing the value of almost all investment and superannuation portfolios with shares, building on the market falls recorded last week immediately after Donald Trump announced the details of his

There were few places to hide on the ASX on Monday, with everything from banking to mining and energy stocks down sharply.

Shares in Australia’s two biggest listed companies, Commonwealth Bank and BHP, were both down more than 8% in early trading.

The sell-off follows a sharp fall on Wall Street on Friday, weighed down by China’s retaliatory tariffs to Donald Trump’s new trade regime.

Traders view Australia’s economy as being closely tied to China through their significant trading relationship.

Tony Sycamore, market analyst at IG Australia, said China’s 34% retaliatory tariffs on all US imports, due to come into effect this week, had sparked fears of a “full-blown trade war, imminent recession and a liquidity crunch last seen during the early pandemic”.

He said while “the door for negotiation” remained open for countries to strike deals with Trump, there was a risk that relief didn’t arrive quickly enough to prevent the global economy from falling into recession.

Currency woes

The Australian dollar fell to its lowest level against the US dollar since Covid, as global markets sold off against the prospects of a global recession.

One Australian dollar was buying 60 US cents on Monday morning after falling to a low of 59.64, its lowest point since April 2020. It was worth 64 US cents mid-last week, hours before Trump set markets reeling with his tariff announcement.

The Australian dollar also reached pandemic-era lows in Europe, with one dollar buying just 54.4 Euro cents or 46.2 British pence at its lowest point on Monday morning.

Markets were selling off the Australian dollar in Asia, too. It was worth less than 15,500 Vietnamese dong on Monday when it had been buying almost 16,500 dong on Wednesday. The dollar slumped in India, Indonesia and New Zealand.

“When there is concern about a global slowdown, and particularly from the tariff and global trade war, then there is less demand for our commodity,” AMP economist My Bui said, referring to iron ore.

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