ASX slips below 8000 mark as CBA, tech stocks cop a hit

The Australian sharemarket has posted its lowest close in six months, extending its losing streak as a heavy selloff in Commonwealth Bank and ongoing anxiety over the unfolding global trade war took a toll on the index.

The S&P/ASX 200 closed well below the 8000 mark, down 1.8 per cent, or 146.5 points, at 7948.2 as investors digested the latest twist in the tariffs imposed by the Trump administration and continued weakness in the US technology sector.

On Thursday, the ASX fell 0.6 per cent. The S&P/ASX 200 lost 4.2 per cent in February, its worst month in more than two years.

Wall Street slumped on Thursday night, dragged down by AI superstars including Nvidia.Credit: Bloomberg

Ten of the 11 industry sectors declined, with technology the biggest loser. The Australian dollar was trading at US63.32¢.

The big four banks all took a hit, extending their losses from Thursday. The country’s largest lender, Commonwealth Bank, dropped sharply to close 3.3 per cent weaker. ANZ (down 2.4 per cent) and NAB (down 0.1 per cent) also recorded losses.

Westpac slid 2.2 per cent after announcing that consumer chief executive Jason Yetton would be leaving the bank. Yetton, who will continue working until a successor is named, is the third executive to resign since September.

The information technology sector is also in the red, dragged down by a 3.2 per cent drop for embattled tech company WiseTech Global. Xero (down 3.5 per cent) and TechnologyOne (down 1.8 per cent) also posted a poor start.

Miners slipped into the red after a positive start. BHP fell by 0.6 per cent, goldminer Newmont closed flat and Fortescue slipped 1.2 per cent.

Takeover target Insignia Financial jumped 10 per cent after private equity suitors Bain and CC Capital both lifted their offers to $5 cash per share. Alcohol retailer Endeavour Group was also among the heavy decliners, falling 2.8 per cent. But the consumer staples sector was buoyed by the supermarket giants: Woolworths and Coles were up 0.6 per cent and 0.8 per cent, respectively.

“The horrific price action in the ASX200 has continued today, slipping below 8000 for the first time in almost six months,” said Tony Sycamore, market analyst at IG. “This week’s fall has seen the correction in the ASX200 from its 8615 high deepen to approximately 7.25 per cent, a move that has unfolded in just four weeks.

“The falls this week have been driven by several factors, including US trade policy uncertainty at a time when fears of a looming US recession are rising. Locally, the falls have been exacerbated by more weakness in the big banks and worsened after BHP, RIO, South32 and energy giant Woodside all traded ex-dividend,” Sycamore said.

“As for a potential catalyst for a turnaround in the ASX200, there isn’t a clear one currently. US trade and tariff policy appears likely to remain volatile, and the upcoming federal election adds to the uncertainty, with the possibility of a hung parliament,” he said.

In the US, the S&P 500 tumbled 1.8 per cent on Thursday to resume its slide after a mini-recovery from the day before clawed back some of its sharp drop over recent weeks. The Dow Jones Industrial Average fell 427 points, or 1 per cent, and the Nasdaq composite sank 2.6 per cent to finish more than 10 per cent below its record set in December.

Stocks fell even though US President Donald Trump on Thursday offered a one-month reprieve from his 25 per cent tariffs on many goods imported from Mexico and Canada. That’s unlike the bounce stocks got the day earlier from his giving a one-month exemption specifically for automakers.

Semiconductor companies and their suppliers were particularly heavy weights on the market, after soaring to staggering heights because of the frenzy around artificial intelligence technology.

Marvell Technology dropped 17.3 per cent, even though it reported results for the latest quarter that edged past analysts’ forecasts. It also said it expected revenue growth in the current quarter of more than 60 per cent from the previous year, give or take a bit.

But that wasn’t enough for investors, who have grown used to AI-related companies trouncing expectations.

The poster child of the AI boom, Nvidia, fell 5 per cent. Broadcom lost 5.8 per cent ahead of its earnings report, which will arrive after trading ends for the day. They were two of the three heaviest weights on the S&P 500.

The increased scrutiny on AI winners is hitting the market when worries are already high about Trump’s tariffs and a weaker-than-expected US economy.

On Thursday, Trump gave a one-month reprieve from his 25 per cent tariffs on most goods from Mexico after a conversation with President Claudia Sheinbaum. That followed his giving a one-month exemption on Wednesday for US automakers on his stiff new tariffs for Mexican and Canadian imports.

The moves resuscitate hopes on Wall Street that Trump is using tariffs just as a tool for negotiations and that he may ultimately avoid a worst-case trade war that grinds down economies and sends inflation higher.

But Trump is still pressing ahead with other tariffs scheduled to take effect on April 2. And the dizzying back-and-forth moves on tariffs are amping up the uncertainty that has already upset the market. It was only on Monday that Trump said there was “no room” left for negotiations that could lower the tariffs on Mexico and Canada, which took effect on Tuesday.

“Much will depend on whether these new tariffs prove temporary or are toned down,” strategists at BNP Paribas said. “But even if they are ultimately removed, we anticipate lasting damage to global economic activity.”

With AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.