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The ASX fell hard in early trade, following a brutal night on Wall Street where the benchmark S&P500 fell 2.5% on fears that the Trump administration is pushing the global economy into a trade war.
The ASX200 slumped below 5900 at the open and at 12.50 (AEDT) it was at 5,818.20, down 119.00 points or 2%.
The Nikkei 225 fell just over 3% when markets opened in Tokyo.
Mining companies on the ASX have been smashed, with BHP, the world’s biggest mining company, down almost 4% to $28.57 and Rio Tinto down 4.6% to $73.23.
All the big four banks were sliding. The ANZ was at $27.69, a 1.7% fall.
Bonds are rallying, with the yield on the benchmark 10-year Australian government bond tightening from just under 2.7% to 2.65%, signalling market demand for safe-haven assets. US 10-year Treasuries are also bid, with the yield falling from as high as 2.93% to 2.81%. (Yields fall when bond prices rise.)
Bluescope Steel was down 4.7% to $14.96.
Among retailers, department store Myer fell 8.3% to $0.362 and JB Hi-Fi 2.2% to $25.63.
US President Donald Trump signed a memorandum overnight that could impose tariffs on up to $US60 billion of Chinese imports.
The Dow Jones index closed 2.9% lower and the tech-heavy Nasdaq fell by 1.8%.
“Stocks were pulverised and industrial commodities sank on the announcement of US tariff barriers aimed at China,” said CMC Markets chief market strategist Michael McCarthy in a note ahead of the start of trade. “China’s response was swift and uncharacteristically blunt, and investors rushed for safety, driving bonds and gold higher. While the sanctions may later prove a negotiating tactic the impact on Asia Pacific markets today will be dramatic.”
Nick Twidale, COO at Rakuten Securities Australia, said: “Further uncertainty and increased tensions will only lead to further downside to the stock markets and to risk appetite.”
Here’s the chart showing the start of trade at the ASX open:
