The Australian sharemarket faced a challenging day on Friday, April 11, 2025, closing lower as the ongoing trade war between the United States and China continued to create volatility in global markets. The S&P/ASX 200 index fell by 63.1 points, or 0.82%, finishing the day at 7646.5 points. This decline capped off a week characterized by significant fluctuations, with the index recording its second consecutive weekly loss, down approximately 0.3% overall.
This week’s turbulence was largely triggered by the White House's decision to raise tariffs on Chinese imports for the third time, pushing the total tariff rate from 125% to 145%. The announcement came amid a backdrop of heightened tensions and retaliatory measures from China, which imposed its own tariffs at a staggering 84%. As a result, U.S. equities took a sharp downturn on Thursday, April 10, with the Nasdaq Composite plummeting 4.3% and the S&P 500 dropping 3.5%. These developments had a ripple effect, influencing the Australian market as investors reacted to the uncertainty.
Despite the overall downward trend, there were pockets of resilience. The gold sector emerged as a standout performer, surging by 5% on Friday. Notable gains were seen across various gold mining stocks, including Northern Star Resources, which rose by 5.5%, and Newmont Corporation, which increased by 5.3%. Smaller companies in the sector also thrived, with Rox Resources jumping 12.9% and Ora Banda Mining climbing 14.8%. Black Cat Syndicate led the pack with a remarkable 14.9% increase.
Market analysts noted that the volatility was exacerbated by hedge funds and retail investors driving much of the trading activity. According to Elise Mackay, a portfolio manager at Pendal, "There’s been a lot of nibbling around the edges, but there’s not necessarily large-scale, long-only buying." This sentiment reflects the cautious approach many investors are taking amid the swirling uncertainties surrounding trade policies and their implications for corporate earnings.
In terms of sector performance, technology, energy, and banking stocks faced significant sell-offs. Major banks like National Australia Bank, Westpac, and ANZ all saw declines of more than 1%. However, Commonwealth Bank managed to buck the trend, edging up by 0.1% to close at $154.68. Energy stocks were also under pressure despite a rise in oil prices, with Woodside Energy dropping 2.1% to $19.63 and Santos falling 1.1% to $5.50.
The ASX 200 started Friday's trading session on a particularly weak note, beginning 185 points lower, equivalent to a 2.4% drop. However, the index managed to recover somewhat throughout the day, closing 122 points above its session low. This recovery was fueled by a sense of optimism among some investors that the market had reached an inflection point in response to President Trump's recent policy reversals.
On Wednesday, April 9, Trump remarked, "The bond market right now is beautiful," a statement that came just hours before he announced a significant policy shift regarding tariffs. This about-face was viewed as a necessary response to the rising yields on U.S. Treasury bonds, which have been increasingly indicative of investor concerns over inflation and economic stability.
Despite the day's losses, the ASX 200 closed nearly 500 points above its weekly lows, indicating a degree of resilience in the face of adversity. For the week, the index finished down just 21.3 points, or 0.28%, which, while still negative, reflects a relatively modest decline considering the broader market dynamics at play.
As the trading week comes to a close, the focus remains on the evolving trade situation between the U.S. and China. With ongoing tensions and the potential for further tariff increases, investors are advised to remain vigilant. The market's reaction to these developments will be critical in shaping the outlook for the upcoming weeks.
Looking ahead, analysts suggest keeping an eye on the upcoming economic data releases and how they might influence market sentiment. The interplay between U.S. trade policies and global economic conditions will likely remain a pivotal factor for the Australian sharemarket as it navigates these turbulent waters.
In conclusion, Friday's trading session underscored the volatility that continues to characterize the Australian sharemarket amid the ongoing trade war. While certain sectors, particularly gold mining, demonstrated strong performance, the broader market remains susceptible to the impacts of international trade dynamics. Investors will need to stay informed and adaptable as these developments unfold.
