Banks and miners weigh on ASX; AMP names new boss

Shares in the country’s biggest miners and banks dragged down the Australian sharemarket on Tuesday, as fallout over US Donald Trump’s push to take control of Greenland weighed on investor sentiment.

The S&P/ASX200 closed 58.60 points or 0.7 per cent lower at 8815.90, as the broader All Ordinaries lost 56.30 points, or 0.6 per cent, to 9138.60. Seven of the market’s 11 sectors were weaker, with real estate, miners, banks and energy companies all losing ground.

US markets were paused for a public holiday on Monday night, so investors took their lead from a soft session in Europe, where markets slumped on fears of fresh American tariffs on EU companies in response to Trump’s comments on Greenland earlier this week.

“This may be compounded by broadly rising geopolitical tensions, not just regarding Greenland, but across Europe and the Middle East, with the International Monetary Fund warning of major risks building,” Moomoo market strategist Jessica Amir said.

“As such, investors are selling growth stocks and taking profits, and throwing everything but the kitchen sink into precious metals for safety.”

The iron ore giants all fell, with BHP and Rio Tinto both shedding 2 per cent, as Fortescue lost 0.6 per cent. BHP released a production report showing the mining giant had accepted lower prices for its exports of Australia’s most lucrative commodity, the steel-making ingredient iron ore, amid a protracted stand-off in negotiations with its major buyers in China.

It was also a soft day for bank shares, with Commonwealth Bank (down 1.8 per cent), Westpac (down 1 per cent), National Australia Bank (down 0.9 per cent) and ANZ Bank (down 1.2 per cent) all closing in the red. Investment giant Macquarie Group also lost 1.8 per cent.

Financial services business AMP lost 0.8 per cent after it said chief executive Alexis George was retiring, to be replaced by AMP’s finance chief Blair Vernon. George has led AMP since 2021 during a period of major change, as the company sought to rebuild and refocus after it had a bruising experience during the 2018 royal commission into financial misconduct.

Origin Energy gained 2.6 per cent after it said it would keep the nation’s biggest coal-fired power plan, Eraring, running until 2029 instead of 2027, following fresh warnings that the electricity grid is under-prepared to manage its imminent retirement without worsening the threat of blackouts.

Overnight, European shares mostly fell after Trump at the weekend threatened to slap a 10 per cent extra tariff on imports from eight European countries because they oppose the US taking control of Greenland.

Germany’s DAX lost 1.3 per cent, the CAC 40 in Paris fell 1.9, and Britain’s FTSE 100 declined 0.4 per cent. US stockmarkets were closed for Martin Luther King Jr Day, futures pointing to a 1 per cent fall in the S&P 500.

The European countries targeted by Trump blasted his threat to raise tariffs, saying they “undermine transatlantic relations and risk a dangerous downward spiral”. The unusually strong joint statement was the most forceful rebuke from the European allies since Trump returned to the White House almost a year ago.

Trump’s moves are testing the strategic alignment and institutional trust underlying support from Europe, the largest trading partner and provider of financing to the US, Stephen Innes of SPI Asset Management said.

“In a world where geopolitical cohesion within the Western alliance is no longer taken for granted, the willingness to recycle capital indefinitely into US assets becomes less automatic. This is not a short-term liquidation story. It is a slow rebalancing story, and those are far more consequential,” Innes said.

Trump’s threat to impose levies on countries opposing his bid to claim authority over Greenland risks reigniting the volatility that rattled markets in the early months of his second term. The sell-off deepened after European officials signalled they were unlikely to back down and were considering retaliation.

“The nervousness is palpable,” said Alexandre Baradez, chief market analyst at IG in Paris. “All in all, you have so many issues piling up – from credit cards to the independence of the Fed and tariffs – that I really don’t see the case for stock markets to keep on breaching new records.”

The stand-off is happening at a time when risk appetite has been supported by resilient earnings and sustained investment in artificial intelligence. The outlook will hinge in part on the European Union’s response, with the bloc in talks to impose tariffs on €93 billion ($161.3 billion) of US goods.

French President Emmanuel Macron intended to request the activation of the EU’s so-called anti-coercion instrument, Bloomberg reported over the weekend. German leader Friedrich Merz, however, said on Monday that Germany’s heavier dependence on exports meant it was less willing to unleash the counter-measure.

Francisco Simón, the European head of strategy at Santander Asset Management, said: “The key element to watch in the coming days is whether the message translates into formal measures or remains purely rhetorical, which would make a clear difference in the market reaction.”

With AAP, AP, Bloomberg

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