Australian equity investors have endured the worst start to the year since the onslaught of COVID-19, with financial markets on shaky footing ahead of an imminent barrage of US tariffs that could raise the spectre of a recession and accelerate a violent rotation out of risk assets.

The local sharemarket has taken its cues from heavy selling on Wall Street, with traders erasing more than $41.6 billion of market value from the ASX on Monday. The selling extended the S&P/ASX 200’s first-quarter slump to 3.9 per cent, its worst Q1 since the pandemic roiled markets in 2020.