The Australian sharemarket experienced a sharp decline on Friday morning, driven by renewed trade tensions initiated by US President Donald Trump and higher-than-anticipated inflation figures in the United States. President Trump’s decision to increase tariffs on key trading partners, including a rise from 25 to 35 per cent on Canadian imports, coupled with a 10 per cent base tariff on all imports, has unsettled investors. Concurrently, US inflation exceeded expectations in June, as tariffs pushed up import prices, reinforcing the anticipation of building price pressures and potentially delaying any rate cuts by the Federal Reserve until at least October.
The S&P/ASX 200 index fell by 81.90 points, or 0.9 per cent, to 8660.90 by 10.15am AEST, exceeding the 0.7 per cent decline indicated by futures trading. Major banks and tech stocks were particularly affected by the sell-off. National Australia Bank decreased by 1.3 per cent, while Commonwealth Bank fell 1.2 per cent. Westpac saw a decline of 1.1 per cent, and ANZ was down by 0.9 per cent. In the tech sector, WiseTech and Xero both retreated by 1.3 per cent.
Utilities were the only sector to record gains on Friday. Origin Energy rose by 0.5 per cent after Jarden Securities upgraded its recommendation to “neutral”. In corporate news, Soul Pattinson, a diversified investment house, saw its shares fall 0.9 per cent as it anticipated a preliminary net asset value (pre-tax) between $12.18 billion and $12.68 billion for FY25, also declaring a fully franked final dividend of 59¢ per share.
Other movements included Downer sliding 0.9 per cent after securing an Integrated Work Package worth up to $220 million over four years with the Department of Defence, and Novonix rising 0.4 per cent after abandoning plans to spin out its graphite assets via an IPO. Bellevue Gold lifted 0.6 per cent after setting production guidance, and ResMed jumped 1 per cent following strong earnings reports. ResMed is a medical device company specialising in sleep apnoea treatments. It experienced strong demand for its devices and predicted higher-than-expected gross margin improvements for the coming year.