ASX falls as banks, tech stocks decline; Reject Shop soars on takeover bid

Welcome to your five-minute recap of the trading day.

The numbers

The relief party on the Australian sharemarket seems to be over as Trump tariffs are back in focus, with local shares trading lower after drops for Nvidia, Tesla and other tech giants dragged down Wall Street.

The S&P/ASX 200 fell 30 points, or 0.4 per cent, to 7969 points when the market closed on Thursday. Seven of the 11 industry sectors declined, led by tech stocks and real estate investment trusts. The ASX added 0.7 per cent on Wednesday.

The Reject Shop is expected to be sold to Canadian value retailer Dollarama.Credit: Edwina Pickles

The lifters

Partying on its own, The Reject Shop’s stock soared 109.5 per cent to $6.60 after the discount retailer said it agreed to be bought by Canadian dollar shop chain Dollarama to more than double its $3.15 closing price from Wednesday night.

Among the brighter spots of the day’s trade were energy stocks, with oil and gas giants Woodside (up 1.5 per cent) and Santos (up 0.6 per cent) and refiner Ampol (up 1.7 per cent) all advancing after oil prices strengthened overnight.

Mining heavyweights BHP (up 0.3 per cent) and Rio Tinto (up 0.1 per cent) also gained after a rise in iron ore prices.

The laggards

Financial stocks, which make up almost a third of the local market and thus can move it more than other sectors, recouped on lunchtime losses to end the day mixed. CBA – the nation’s biggest lender – was down 0.1 per cent. Westpac (up 0.7 per cent), National Australia Bank (up 0.4 per cent) and ANZ Bank (up 0.1 per cent) all had incremental lifts.

But it was the tech sector that had the biggest losses, with local IT stocks tracking their Wall Street peers. WiseTech Global, the biggest tech firm on the ASX, shed 2 per cent, while software makers Xero (down 0.3 per cent) and Technology One (down 1.6 per cent) also fell. Data centre operator Next DC dragged the sector down further, falling by 6.5 per cent.

Wall Street’s “Magnificent Seven” slumped on Wednesday, setting the ASX on a downwards path.Credit: AP

Data centre and warehouse owner Goodman Group led property stocks lower with a 4 per cent fall, while retail landlords Scentre (down 1.4 per cent) and Stockland (down 1 per cent) dropped.

Real estate marketplace Domain fell 4.9 per cent to $4.25 after US property giant CoStar said its sweetened $4.43 a share takeover bid for the company was its “best and final offer”.

The lowdown

Shortly before the ASX opened, Trump signed an order to slap a 25 per cent tariff on all cars not made in the US – effective from April 2. However, reciprocal duties that are set to be announced next week would be “very lenient”, he said. China may also get a tariff reduction to secure a deal on the sale of social video platform TikTok to an American company, Trump added.

Tony Sycamore, Market Analyst at IG, says that the announcement doesn’t come as a complete shock because some US banks had already accounted for product-specific tariffs.

“However, the timing was unexpected, occurring less than a week before the April 2 announcement date for reciprocal tariffs and disrupting the recent trend of milder tariff rhetoric that has driven a rally in US equity markets from the mid-March lows,” Sycamore said.

“While US equity futures, the Japanese Yen, and the EUR/USD have bounced back from the losses that followed the tariff news, the ASX 200’s rebound has been more subdued than expected,” he said. “The most likely cause of this is concerns that the latest tariff developments represent another challenge to global trade and growth, which the Australian economy depends on.”

Overnight on Wall Street, the S&P 500 sank 1.1 per cent to break what had been a run of calmer trading. The Dow Jones swung from a gain in the morning to a loss of 0.3 per cent, while the weakness for Big Tech sent the Nasdaq composite to a market-leading drop of 2 per cent.

The group of dominant stocks known as the Magnificent Seven has been at the centre of the US stock market’s recent sell-off, which earlier this month took the S&P 500 10 per cent below its all-time high for its first correction since 2023. Big tech had rocketed in earlier years amid a frenzy around artificial intelligence technology, and critics said their prices rose too quickly compared with their already rapidly growing profits.

Nvidia fell 6 per cent to bring its loss for the young year so far to 15.5 per cent. It was the single heaviest weight on the S&P 500 by far.

Tesla has been contending with additional challenges, including worries that political anger at its CEO, Elon Musk, will hurt the electric vehicle maker’s sales. Tesla dropped 5.6 per cent to extend its loss for 2025 to 32.6 per cent.

The US stock market had been steadying somewhat following its drop into a correction, with a three-day winning streak running through Tuesday. But strategists along Wall Street have warned the sharp swings are not likely to be over yet, with a suite of US tariffs scheduled to arrive next week. Even if those end up less painful for the global economy than feared, all the talk about tariffs has already soured confidence among US consumers and companies.

Tweet of the day

Quote of the day

“Billed as a measure to help workers earning less than $175,000 switch jobs and get a pay rise more easily, and boost economic productivity, the policy proposes to ban non-compete agreements for staff that stop workers from defecting to other employers or striking out on their own.”

That’s Jessica Yun and Shane Wright on the Albanese government’s budget measure for hairdressers that has been blasted as “misguided”, “heavy-handed” and “crippling”. You can read more of that story here.

With AP, Bloomberg

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