Market update: 11 March 2025
The ASX 200 fell another 2.7% this week, closing below 8,000pts for the first time in six months, extending its decline to 7.1% from record highs just three weeks ago. The market initially gained 0.9% on Monday, but four consecutive days of selling erased those early gains. 10 out of 11 sectors ended lower, with energy stocks down 7.5%, as oil prices hit a three-year low, and financials fell 4.6%, weighed down by insurers facing losses from tropical Cyclone Alfred. Ongoing uncertainty around US tariffs added to the market’s volatility, with investors struggling to gauge the long-term implications of Trump’s escalating trade policies.
US markets also saw heavy losses, with the Nasdaq down 3.5%, the S&P 500 falling 3.1%, and the Dow Jones dropping 2.4%. The S&P 500 is now 6.1% off all-time highs, erasing most of its post-election gains. Trump’s latest round of tariffs—20% on China, 25% on Canada and Mexico—sent global markets into a tailspin, though he later announced exemptions for USMCA trade agreement goods. Investors pivoted away from discretionary stocks, with consumer staples outperforming consumer discretionary by 395bps, reflecting growing stagflation concerns. Despite the volatility, there’s optimism about the US economy’s productivity growth, with the February jobs report adding 151,000 jobs, slightly below expectations but still signalling resilience.
Elsewhere, markets were mixed, with European equities mostly lower, while Greater China stocks surged. The Euro Stoxx 600 fell 0.7%, despite Germany and the EU announcing new spending plans. The ECB cut rates by 25bps, bringing the deposit rate to 2.50%, though its tone remained slightly hawkish. In China, the Hang Seng rallied 5.6%, and the Shanghai Composite rose 1.6%, driven by Beijing’s pledge to support AI industries. Meanwhile, Japan’s Nikkei dropped 0.7%, tracking US market losses, though speculation is growing that the Bank of Japan may hike rates again in May. With rate cuts, tariffs, and inflation in focus, we’ll continue tracking the key drivers shaping markets.
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