Australian shares drop 4% in worst session since pandemic on Trump tariff shock

By Sameer Manekar

April 7 (Reuters) - Australian shares plunged on Monday, in their worst session since the pandemic began as sweeping U.S. tariffs under President Donald Trump fuelled recession fears and wiped out billions from stock market value.

The S&P/ASX 200 index .AXJO finished 4.2% lower at 7,343.30 points, after plummeting as much as 6.5% in early trading hours.

Miners .AXMM, heavily exposed to Chinese commodity demand, slumped to a near three-year low, with BHP BHP.AX, Rio Tinto RIO.AX, and Fortescue FMG.AX dropping between 3% and 6%.

Banks .AXFJ hit eight-month lows on Monday, with the Big Four — trading at steep premiums — shedding over $18 billion in market value. Top lender Commonwealth Bank of Australia CBA.AX lost 6% in its worst session in more than three years.

Around $69 billion in value was wiped off the benchmark on the day, as per Reuters calculation based on LSEG data. It is down nearly 15% since the mid-February all-time high.

Global markets extended their slide into the new week, as the White House showed no sign of retreating from unexpectedly harsh tariff plans unveiled last Wednesday, triggering a broad-based asset selloff.

Australian Treasurer Jim Chalmers said the resource-rich country would manage the direct impact of U.S. tariffs, but growth would take a hit as the U.S. and Chinese economies slow. China is Australia's biggest trading partner.

"Uncertainty is high as markets recalibrate for the economic impact of the tariffs," said Kerry Craig, Global Market Strategist at J.P. Morgan Asset Management.

Energy stocks .AXEJ plumbed 7% to their lowest since early November 2020. Heavyweights Woodside Energy WDS.AX and Santos STO.AX dropped around 6% and 10%, respectively.

Tech stocks .AXIJ fell 2.3%, while discretionary consumer stocks .AXDJ lost 4.8%. Healthcare sector .AXHJ also lost more than 4%.

New Zealand's benchmark .NZ50 shed 3.7% to finish at 11,775.88 points, its lowest since early July last year.

($1 = 1.6603 Australian dollars)