Synopsis
On April 7, the Australian stock market faced its largest single-day decline since 2020, influenced by the ongoing effects of US tariffs. The S&P/ASX 200 index dropped 4.2%, marking a significant financial downturn impacting various sectors and prompting concerns from government officials.Key Takeaways
- Australia's share market fell 4.2% on April 7.
- Largest single-day drop since May 2020.
- Market value loss exceeded 100 billion AUD.
- Significant declines in banking, energy, and mining sectors.
- Government officials express concerns over superannuation funds.
Sydney, April 7 (NationPress) The Australian share market has experienced its most significant single-day decline since 2020 due to the ongoing repercussions of extensive US tariffs.
The S&P/ASX 200—the primary index for Australia's share market—closed down 4.2 percent on Monday, finishing at 7,343.3 points, resulting in losses exceeding 100 billion Australian dollars (or 60.1 billion US dollars).
According to the Australian Broadcasting Corporation, this marks the index's largest one-day drop since May 2020.
This decline represents a 14.1 percent decrease from the market's all-time high close of 8,555.8 points recorded on February 14 and is the lowest closing figure for the index since December 2023.
The benchmark index was down by more than 6 percent just minutes after opening on Monday, leading to a market wipeout worth around 160 billion Australian dollars, although it did recover slightly later.
Australia's banking, energy, and mining sectors were particularly affected by the downturn.
The Commonwealth Bank of Australia, which is the largest bank in the nation, saw a drop of 6.2 percent, while the multinational mining corporation BHP fell by 6.1 percent.
In response to the decline on Monday morning, Prime Minister Anthony Albanese expressed his concerns regarding the impact on superannuation funds, as reported by the Xinhua news agency. Superannuation is a system in Australia where a portion of an employee's salary is directed into an investment fund accessible upon retirement.
"We are witnessing a considerable negative impact on the stock market that affects Australians because superannuation funds hold shares there," Albanese informed reporters.
"I am worried about the ramifications in Asia. The tariffs' effects in Asia have been significant," he added.
Earlier on Monday, the value of the Australian dollar fell below 60 US cents for the first time since 2020.
Treasurer Jim Chalmers mentioned that the market anticipates multiple interest rate cuts throughout the year, starting with the next meeting of the Reserve Bank of Australia's monetary policy board in mid-May.
