Weekly Wrap: ASX 200 Ends Week Slightly Lower Amid Tariff Turmoil and Bank Losses
Australian shares probably did well to close little changed for the week as some positive news on Trump’s tariffs still resulted in significant weakness in bank shares.
Across the week the ASX 200 index only dropped 0.1% but Friday was a particularly damaging day with the index falling 80.8 points or 0.92% to 8662 points by the close of trade on Friday.
Ten of the 11 ASX sectors closed in the red with financials, healthcare and technology shares particularly hard hit by the news that Australia had avoided the worst on the tariff front, being lumped in with other countries with a trading surplus, and hit with a 10% general tariff.
Tariffs vary considerably
Our cousins in New Zealand were not so lucky, scoring a rise to 15%, and there were plenty of hard luck stories to be had, including 41% for war-torn Syria, 40% for Myanmar, 39% for Switzerland, and 40% for Laos.
Like many of Trump’s decisions though, there is still plenty of uncertainty about how the global system of trade will actually function with a system of apparently arbitrary US tariffs, which could well change again during a further period of negotiation.
It is hardly a serene picture of steady business predictability and that showed during Friday’s trade, despite Australia dodging the worst and copping a general 10% tariff, plus higher tariffs on certain sectors.
Hefty losses for the banks
The big banks chalked up some hefty losses with Commonwealth Bank (ASX: CBA) down 1.6% to $175.00, National Australia Bank (ASX: NAB) off 1.3% to $38.41 and Westpac (ASX: WBC) off 1%.
ANZ (ASX: ANZ) bucked the trend with its shares up 0.7% to $30.94.
Technology was a particular market weak spot with WiseTech Global (ASX: WTC) down 2.5%, Xero (ASX: XRO) falling 3.4% to $174.75 and Life360 (ASX: 360) weakened by 3% to $38.96.
Miners are mixed
The picture was more mixed for the big miners, with Singapore iron ore futures up 0.8% to US$100.60 a tonne.
That helped to push shares in Fortescue Metals (ASX: FMG) 1.2% higher to $17.98 while BHP (ASX: BHP) rose 0.1%, and the volatile Mineral Resources (ASX: MIN) bounced 4.4% to $29.86 following a 7.1% drop on Thursday.
Rio Tinto (ASX: RIO) fell 0.7% to $110.90.
It was a tough day in the office for Star Entertainment (ASX: SGR) shareholders as its shares slumped 16.4% to a record low of 9.2¢ after its deal to sell its Queen’s Wharf hotel and casino development to Hong Kong–based joint venture partners fell apart.
Instead of paying down some debts the troubled casino operator must now repay $41 million to its partners.
Stronger than expected demand for sleep apnoea devices saw ResMed (ASX: RMD) rise 1% to $42.88 after the company beat fourth-quarter earnings forecasts and predicted higher-than-expected gross margins for the year ahead.
After rising in early trade, shares in Novonix (ASX: NVX) went into reverse and fell 4.4% after the battery materials maker ditched plans to spin out its graphite assets through a float of Axon Graphite due to poor market conditions.
The week ahead
A swag of company reports this week marks the start of the Australian reporting season so there should be plenty of market reaction as companies disappoint or delight their owners.
It is a similar situation in the US, as the June quarter results continue to flow.
Locally there will also be a swag of economic data released including figures on inflation, jobs, household spending, international trade and business turnover.
Aside from further details on the Trump tariffs, the Bank of England is worth watching, with a strong expectation it will cut official interest rates by 25 basis points to 4% on Thursday.