The Australian share market slipped from its record highs on Tuesday as declines in energy stocks and renewed tariff threats from U.S. President-elect Donald Trump weighed on investor sentiment.
The S&P/ASX 200 Index fell 58.2 points, or 0.7%, to close at 8485, retreating from Monday’s record close.
Energy stocks led the downturn, dropping 3.1% as oil prices declined following reports of an impending ceasefire between Israel and Hezbollah.
The energy sector faced significant losses, with Woodside Energy tumbling 3.8% and Santos falling 4.2%.
The weakness followed a drop in Brent crude prices, which fell 2.8% overnight in U.S. trading before stabilising just above $73 per barrel during Tuesday's Asian trading session.
The proposed 60-day ceasefire in the oil-rich Middle East region signalled emerging stability, reducing the risk premium priced into crude oil.
Adding to the market's woes, President-elect Donald Trump reignited tariff concerns by announcing plans to impose a 10% tariff on Chinese goods and a 25% tariff on imports from Canada and Mexico. Trump attributed the decision to issues related to illegal migration and narcotics trafficking.
The financial sector was also hit, with Commonwealth Bank losing 3.6%. However, Macquarie Group, with its substantial U.S. operations, defied the trend, gaining 0.8%.
The combination of a stronger U.S. dollar and easing demand for safe-haven assets amid ceasefire talks pressured gold prices, impacting ASX-listed miners. St. Barbara shed 4.3%, Emerald Resources dropped 3.5%, while Bellevue Gold fell 2.7%.
Amid the tariff turmoil, stocks with U.S. exposure performed well. BlueScope Steel, a key U.S. supplier, surged 5.6%, while plumbing supplier Reece gained 2.2%.
Meanwhile, EML Payments soared 29.2% after reporting a 46% increase in underlying earnings for the first quarter of FY25.
On the bond markets, 10-year and 2-year rates were at 4.45% and 4.027%, respectively.