The Australian sharemarket closed lower on Friday, sealing a week that had the bourse record some of its most outsized moves since 2020 as a trade war between the world’s two largest economic powers gathered momentum.

The S&P/ASX 200 fell 0.8 per cent, or 63.1 points, to 7646.5 points at the close. The index dropped more than 2 per cent earlier in the session, but improved in afternoon trading as US futures climbed. The ASX 200 tumbled around 0.3 per cent this week – its second consecutive weekly loss.

US equities hurtled lower on Thursday, partially reversing the prior session’s record-breaking gains, after the White House lifted its tariff rate on Chinese imports for the third time this week. The Nasdaq Composite plunged 4.3 per cent and the S&P 500 tumbled 3.5 per cent, weighed by a slump in Tesla shares.

US futures pointed to further swings as S&P 500 and Nasdaq contracts rose more than 1 per cent by the closing bell in Sydney.

Oil reversed an earlier loss amid the flight from risk assets and gold reset a record as investors fled stocks and flocked to haven assets.

More clarity

The White House clarified that total tariffs on China had risen from 125 per cent to 145 per cent overnight and Trump admitted in a cabinet meeting that there would be “transition problems” with his tariffs, reinforcing fears of a prolonged trade war.

Elise Mackay, portfolio manager at Pendal, said hedge funds and retailer investors had driven much of the week’s wild swings, while the volatile environment proved more difficult for long-only managers to navigate.

“There’s been a lot of nibbling around the edges, but there’s not necessarily large-scale, long-only buying,” she said. “Ultimately, you want to take advantage of price movements in these environments – but it’s hard until we have a bit more clarity on the earnings risks.”

Wall Street’s dramatic reversal spilt over to the local bourse as stocks swiftly wiped the prior session’s big gains.

Technology, energy and bank stocks were sold off, with National Australia Bank, Westpac and ANZ down more than 1 per cent. Commonwealth Bank bucked the trend, edging up 0.1 per cent to $154.68. Energy stocks also fell despite the rise in oil prices – Woodside dropped 2.1 per cent to $19.63 and Santos 1.1 per cent to $5.50.

Gold miners were among the strongest performers as prices of the precious metal hit record levels. Emerald Resources jumped 8.4 per cent to $4.12 and Newmont 5.4 per cent to $83.31.

Mineral Resources dipped 2 per cent to $16.67 per cent, paring an earlier fall after Jarden Securities upgraded the stock from “sell” to “underweight”.