ASX expected to fall on the back of Wall St’s tumble

The Australian sharemarket is expected to move lower on Monday, but the mining giants could provide a degree of support.

The ASX is expected to decline 1 per cent on Monday, following Wall Street lower. Picture: Gaye Gerard

A downturn in investor sentiment linked to the US consumer is the latest headache for shares with the Australian sharemarket tipped for a hefty drop on Monday ahead of Donald Trump’s Liberation Day, when he intends to escalate the tariff war.

S&P/ASX 200 futures are pointing to a 1.1 per cent decline at the open after US markets tumbled on Friday when a key inflation reading came in higher than expected.

The benchmark S&P 500 fell 2 per cent, the Dow Jones Industrial Average lost 1.7 per cent and the tech-heavy Nasdaq plunged 2.7 per cent after the latest personal consumption expenditures index showed prices rose 0.4 per cent in February against the prior month to be up 2.8 per cent year-on-year, exceeding the US Federal Reserve’s 2 per cent target.

The higher than expected inflation figure came as US consumer confidence hit a more than two-year low in a further blow for sentiment. Technology stocks were among the hardest hit, with Apple, Amazon, Google and Microsoft all weaker.

While the local market will come under pressure on Monday, CommSec chief economist Ryan Felsman said there could be some positive moves in mining stocks.

“Commodity prices were up on Friday – gold futures hit record highs again, up 1.7 per cent to well over $US3000 an ounce. Iron ore futures were also higher, up 0.1 per cent to $US102.43 a tonne … So our market may get a little bit of support from the miners (on Monday),” Mr Felsman said.

Newly released government forecasts show Australian resource and energy commodity export volumes will rise modestly across the next five years.

However, earnings are expected to fall from $415bn in fiscal 2024 to $387bn in the 2025 financial year, followed by modest falls across the remainder of the five-year outlook period measured by the Department of Industry, Science and Resources.

Exports should steady at about $343bn (or $300bn in real terms) as the decade ends.

Listed energy companies could come under fresh pressure on Monday as oil prices retreat on global growth concerns.

As inflation remains stubborn in the US, Mr Trump is preparing for Liberation Day on April 2, when he plans to slap reciprocal tariffs on several countries.

Lululemon shares crashed 14 per cent in ordinary trading on Friday after the company reported on Thursday that its shoppers were concerned about inflation and the economy. The compamy is swept up in the tariffs imposed on China and Mexico.

The Reserve Bank rate-setting meeting is on Tuesday and the market expects the cash rate to remain on hold at 4.1 per cent after a reduction in February.

Originally published as ASX expected to fall on the back of Wall St’s tumble