ASX Falls Following New Tariff Announcements

madhan

February 26, 2025

ASX Falls Following New Tariff Announcements

Sydney, Australia – February 25, 2025 – The Australian Securities Exchange (ASX) experienced a significant downturn following the announcement of new tariffs by the U.S. government. The benchmark ASX200 index fell by 56.30 points, or 0.68%, closing at 8,251.90 points, while the broader All Ordinaries index declined by 62.10 points, or 0.73%, ending at 8,498.00 points. The market reaction was largely driven by investor concerns over the potential economic impact of the tariffs on global trade and domestic businesses.

Key Factors Contributing to the Decline

Impact of U.S. Tariff Announcements: The U.S. administration announced fresh tariffs on imported goods from Mexico and Canada, set to take effect in March. The tariffs aim to reduce trade imbalances but have sparked concerns over retaliatory measures from affected nations. Global markets, including the ASX, responded negatively to the news. AMP Chief Economist Shane Oliver commented, “Share markets have so far been fairly resilient in the face of uncertainty around tariffs. However, nervousness is creeping in.”
Corporate Earnings Reports: In addition to global trade uncertainties, domestic corporate earnings played a role in the ASX’s decline. Notably, Domino’s Pizza Enterprises saw its share price plummet by 10.47% to $28.89, a decade low, after reporting a $22.2 million loss for the six months ending December 29. This was attributed to $115.6 million in writedowns, impairments, and restructuring costs, with underperformance in Japan and France offsetting growth in Australia.
Banking Sector Losses: The financial sector also faced a downturn:
- Commonwealth Bank of Australia (CBA): -1.25% ($154.27)
- National Australia Bank (NAB): -1.42% ($35.39)
- Australia and New Zealand Banking Group (ANZ): -0.71% ($29.34)
- Westpac Banking Corp (WBC): -0.096% ($31.25)
The banking sector was affected by broader market sentiment and concerns over potential regulatory changes impacting lending practices.

Bright Spots Amid the Decline

Despite the overall negative market movement, some companies performed well:

Woodside Energy’s Positive Performance:
- Shares rose by 2.78% to $24.03 after the company reported a net profit of $US3.57 billion, marking a 115% increase from the previous year.
- The company’s strategic shift towards the U.S. market and focus on cleaner energy initiatives were cited as key drivers of this growth.
Nine Entertainment’s Profit Announcement:
- Nine Entertainment reported a half-year profit of $95 million and announced plans to reduce costs by $100 million over two years.
- The stock responded positively, increasing 3.68% to $1.69.
Zip Co Ltd’s Strong Earnings:
- Zip Co Ltd saw its share price surge by 13.87% to $2.71, following a 117% increase in cash earnings before taxes, depreciation, and amortization (EBTDA) to $67 million.
- The company’s strong U.S. operations, particularly during the holiday shopping period, contributed to this growth.

Market Outlook and Investor Sentiment

Market analysts suggest that the ASX may continue to face volatility in the coming weeks as investors assess the full impact of the new tariffs. While some sectors, such as energy and technology, have demonstrated resilience, broader market sentiment remains cautious.

Shane Oliver further noted, “The market is currently in a wait-and-see mode. Any additional policy shifts from the U.S. or retaliatory actions by Canada and Mexico could influence future performance.”

Investors are advised to monitor developments closely, especially in the lead-up to the tariff implementation in March. As geopolitical and economic uncertainties persist, risk management strategies, including diversification and hedging, are expected to be crucial for portfolio stability.

Sources

This report provides an in-depth analysis of the ASX’s performance following the tariff announcements, offering valuable insights for investors and market observers alike.