On March 12, Australian stocks faced a significant decline, entering what is often termed a correction phase. This downturn was largely influenced by reports indicating that the White House confirmed Australia would not receive exemptions from the U.S. steel and aluminum tariffs. As a result, the S&P/ASX 200 index plummeted by 1.2%, reaching 7,793.6 at 0001 GMT.

Australian Market Takes a Hit

During the trading session, the index witnessed a steep drop of up to 1.6%, marking a decline of about 10% from its peak on February 14. This level of decrease is typically recognized as a market correction. The White House spokeswoman, Karoline Leavitt, stated that Australia would not benefit from the exemptions initially considered by President Donald Trump’s administration, which had acknowledged a trade surplus with Australia back in February.

• Key Facts:
  • S&P/ASX 200 index dropped 1.2% to 7,793.6
  • Declined 10% from the all-time high on February 14
  • No exemptions from U.S. tariffs confirmed

U.S. Market Influence

The turbulence in the Australian market mirrored the situation in the U.S., where equities experienced one of their largest selloffs in months. This was triggered by President Trump announcing a doubling of tariffs on all imported Canadian steel and aluminum products, raising them to 50%. Such developments have left investors concerned about the broader implications of tariff wars on the global economy.

Local Sector Performance

Back in Sydney, the real estate sector suffered, with stocks dropping by as much as 1.5%, reaching their lowest point since July 2, 2024. The financial sector experienced its seventh consecutive day of losses, with heavyweight banks seeing declines between 1.1% and 1.9%. Notably, this downturn has brought the Big Four lenders to their lowest levels since October 7, 2024.

• Sector Highlights:
  • Real estate stocks fell 1.5%
  • Financials dropped up to 1.7%
  • Big Four banks declined between 1.1% and 1.9%

Mining Sector and Safe Havens

In the mining industry, stocks decreased by 0.7%, consistent with the overall market trend. BHP Group, the largest listed miner globally, saw a 1.1% decline, while Rio Tinto and Fortescue experienced drops of 2.2% and 1.6%, respectively. Interestingly, gold stocks bucked the downward trend, rising by 0.8% as investors sought safe havens amid concerns over economic slowdowns linked to ongoing tariff conflicts.

New Zealand’s Market Response

Across the Tasman Sea, New Zealand’s S&P/NZX 50 index also faced a downturn, falling 0.9% to 12,305.19. This decline reflects the broader regional unease stemming from the international trade climate.

In summary, the Australian stock market is grappling with significant pressures from U.S. tariff policies, resulting in decreased investor confidence and widespread losses across various sectors. As the situation evolves, market participants will be closely monitoring developments both locally and globally.