The S&P/ASX 200 index experienced a decline of 0.4%, settling around 8,780 on Wednesday. This marks its third consecutive session of losses, primarily driven by ongoing apprehensions over escalating tensions between the United States and Europe. Recently, President Donald Trump announced plans to impose new tariffs starting at 10% on February 1st on eight European nations, with a potential increase to 25% by June, contingent on the failure of negotiations regarding US influence over mineral-rich Greenland.
The banking sector, which constitutes a substantial part of the index, saw a decline of 1.3%, reaching a six-week low. This downturn was led by Commonwealth Bank, the largest lender, which fell by 2.1%, as all four major banks ended the day in negative territory. In addition, the local technology sector saw a reduction of 2.3%, reaching a nine-month low, mirroring the downward trend of their counterparts on Wall Street.
Conversely, mining giant Rio Tinto experienced a gain of 2.3%, bolstered by the announcement of increased production forecasts for 2025. Its industry peer, BHP, also showed a minor increase of 0.6%, following a report of record iron ore output for the first half of the fiscal year. Gold stocks hit an all-time high, as the price of bullion surged in response to robust safe-haven demand. Investors are now looking ahead to employment data due this week for further insights into future policy directions.
