Trump tariffs spark Australian market mayhem

Updates to close

By Rajasik Mukherjee and Kumar Tanishk

Feb 3 (Reuters) - Australian equities suffered their worst day in five months on Monday, caught up in the global stocks sell-off as U.S. President Donald Trump's tariffs on imports from China fuelled fears of a global trade war.

The S&P/ASX 200 index .AXJO fell 1.8%, its steepest one-day drop since Sept. 4, to end at 8,379.4, recovering slightly after hitting a two-week low earlier in the session.

On Saturday, Trump imposed 10% tariffs on China, Australia's top trading partner. He also slapped 25% on Mexico and Canada, both of which have announced retaliatory tariffs of their own.

The S&P/ASX 200 volatility index .AXVI, which provides traders with an insight into investor mood and expected levels of volatility, has risen over 22% to 13.07.

Mining stocks .AXMM, which have a roughly 25% weightage on the benchmark and are heavily exposed to China, sank 1.9%.

"Trump's tariffs play a role in deepening investor scepticism of investing in the mining space due to higher levels of uncertainty on an outlook front," said Grady Wulff, a market analyst with Bell Direct.

"The ASX will likely continue its sell-off until we know the clarity around the full impact of Trump's tariffs and until trade stability is established between the world's largest economies in the U.S. and China."

BHP Group BHP.AX, the world's largest listed miner, lost 1.7%, while Rio Tinto RIO.AX declined 1.8%.

Financials .AXFJ declined 1.9%, with the "Big Four" banks down between 1.4% and 2.3%.

Health stocks .AXHJ shed 2.3%, while tech stocks .AXIJ lost 1.9%. Energy stocks .AXEJ fell 0.5%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 retreated 1.4% points to finish the session at 12,810.32 points.

For more information on DIARIES & DATA: U.S. earnings diary  RESF/US   Wall Street Week Ahead   .N/O Global Economy Week Ahead DATA/ ................................................................ For latest top breaking news across all markets          NEWS1