The Australian sharemarket suffered its steepest single-day decline in five years on Monday, with the S&P/ASX 200 plunging 324.5 points, or 4.2%, to close at 7,343.3.
The fall marks the index's lowest level in 15 months, now trading 14.2% below record highs.
The broad sell-off came after China retaliated against U.S. President Donald Trump’s sweeping new tariffs with its own levies, deepening fears of a full-scale trade war.
All 11 sectors on the ASX closed in the red, with energy, financials, and mining stocks leading the retreat.
Energy shares led declines as oil prices hit multi-month lows. Santos shed 9.8%, Woodside lost 5.8%, Beach Energy fell 5.6, and Viva Energy tanked 9.5%.
Financial giants were also sharply lower, with Commonwealth Bank, Macquarie Group, Westpac, and National Australia Bank down 6.2%, 0.8%, 5.6%, and 4.5%, respectively.
Miners bore the brunt of concerns over weakening Chinese demand, dragging the resources sector down by 4.8%.
BHP, Rio Tinto, and Fortescue Metals fell 6.11%, 3.6%, and 3.8%, respectively.
Iron ore prices dropped 3% to US$97.60 a tonne - a three-month low - as investors worried about reduced Chinese appetite for steelmaking inputs.
Market expectations of a 50 basis point rate hike also rose significantly. According to the RBA Rate Tracker, As of April 4, the ASX 30 Day Interbank Cash Rate Futures for the May 2025 contract was trading at 96.035, indicating a 70% probability of the Reserve Bank of Australia cutting interest rates to 3.60% at its next meeting.
On the bond markets, 10-year and 2-year Australian government bonds lost 2.1% and 3.8% to 4.067% and 3.263%, respectively.
