The laggards

Consumer staples suffered the biggest falls,dragged down by supermarket giants Woolworths (down 3.9 per cent) and Coles (down 4.4 per cent). Penfolds maker Treasury Wine Estates (down 5.6 per cent) and bottle shop owner Endeavour Group (down 1.4 per cent) also posted a poor session.

Having largely defied the Trump slump on Tuesday,the market’s financial heavyweights also traded lower,with the big four banks all in the red. CBA,the nation’s biggest lender,fell 0.9 per cent. Westpac shed 1 per cent,NAB lost 1.4 per cent and ANZ Bank fell 0.9 per cent. Fintech Block – which owns point-of-sale systems Square,Cash App and Afterpay – dragged the financials sector down further with a 4.1 per cent slide.

Insurance stocks had a mixed session amid rising concern about the potential damage from Cyclone Alfred,which is expected to make landfall as a category 2 storm near Brisbane at about 2am on Friday,and is forecast to bring with it up to 800 millimetres of rain over four days in parts of north-east NSW. QBE lost 1.5 per cent but IAG (up 1.4 per cent) and Suncorp (up 0.3 per cent) closed in the green.

Energy stocks,which had led Tuesday’s falls,extended their losses as the uncertainty in global markets weighed on oil prices. West Texas Intermediate fell below $US68 a barrel after sliding 3 per cent over the past three sessions. Brent closed near $US71 on Tuesday. Oil and gas giant Woodside edged down 1.5 per cent,while Santos and refiner Ampol lost 1.6 per cent and 4.7 per cent,respectively.

Wall Street suffered the worst two-day drop since December as President Donald Trump’s trade war added to worries about the world’s largest economy. The Trump administration on Tuesday imposed tariffs on imports from Canada and Mexico and doubled its levies on imports from China. All three countries announced retaliatory actions,sparking concern about global trade.

The lowdown

The market slump extended further after data showed Australia’s economy accelerated in the final three months of last year,supporting the Reserve Bank’s cautious approach to further interest rate cuts. Gross domestic product advanced 0.6 per cent,in line with economists’ estimate and double the pace recorded in the third quarter,the Australian Bureau of Statistics said. On a per capita basis,GDP rose 0.1 per cent following seven consecutive quarters of falls.

Although slightly better than expected,the December quarter GDP outcome can “hardly be described as a beautiful set of numbers,” said David Bassanese,chief economist at Betashares.

“The economy remains stuck in the slow lane,thanks to high interest rates bearing down on private demand,” Bassanese said. “A key takeaway is that household consumer spending remained subdued in final months of 2024 despite the mid-year tax cuts.

“There’s also growing signs that the persistent weakness in consumer spending has started to take its toll on business investment,further dampening overall private demand. Today’s report suggests the risk of a strong bounce back in private demand – especially consumer spending – in the absence of lower interest rates seems low,” he said.

In the US,the Nasdaq composite slipped 0.4 per cent on Tuesday. The tech-heavy index briefly reached a 10 per cent decline from its most recent closing high,which is what the market considers a correction,but gains for Nvidia,Microsoft and other tech heavyweights helped pare those losses.

The recent decline in US stocks has wiped out all of the market’s gains since Trump’s election in November. That rally had been built largely on hopes for policies that would strengthen the US economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the world’s largest economy and Wall Street.

Tweet of the day

Quote of the day

The narrative around Donald Trump’s return to office was that no matter whether you loathed or loved him,he was meant to be good for Wall Street. It’s early days,but you don’t hear Trump talking about the sharemarket any more as proof of his successful management of the US economy. Instead,we’re seeing the Trump slump as he continues to rattle the economy.

That’s Elizabeth Knight on Trump and big business in the US. You can read more of the columnhere.

With AP,Bloomberg

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