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Highlights

  • S&P/ASX 200 index falls 0.6%, breaking a five-day rally on trade war and financial sector pressure.
  • Banks and tech stocks drag the market down, with "Big Four" banks losing up to 0.7%.
  • Oil and mining stocks see some gains, driven by higher oil prices and stronger iron prices.

Australian shares faced a setback on Thursday, March 27, with the S&P/ASX 200 index (.AXJO) dropping 0.6% to 7,950.6. This marks a pause in the index’s five-day rally as concerns about trade tensions and weakness in the financial sector weighed on market sentiment. The benchmark had closed 0.7% higher on Wednesday, but Thursday’s decline erased part of the recent gains.

The primary drag on the market came from the banking sector, with the S&P/ASX 200 Financials Index (.AXFJ) falling 0.8%. The “Big Four” banks – Commonwealth Bank (CBA.AX), Westpac (WBC.AX), ANZ (ANZ.AX), and National Australia Bank (NAB.AX) – each saw losses between 0.1% and 0.7%, contributing to the broader market weakness.

Adding to the pressure, trade war concerns resurfaced after U.S. President Donald Trump announced a 25% tariff on imported cars and light trucks, effective April 2. The news reignited fears of escalating trade tensions, which have already caused market volatility globally.

Tech stocks also followed their U.S. counterparts lower, with the S&P/ASX 200 Information Technology Index (.AXIJ) dropping 2.2%, reaching a one-week low. Xero (XRO.AX) lost 1.3%, while logistics software company WiseTech Global (WTC.AX) saw a sharper 3.6% decline. Additionally, AustralianSuper, a pension fund, sold its stake in WiseTech, citing concerns over the company’s handling of founder Richard White’s transition.

Despite the broader market decline, energy stocks gained, driven by a rise in oil prices. The S&P/ASX 200 Energy Index (.AXEJ) rose 0.6%, with Woodside Energy (WDS.AX) up 1% and Santos (STO.AX) adding 0.2%. Similarly, miners saw a modest 0.2% gain, supported by stronger iron ore prices and the possibility of reduced U.S. tariffs on China, as President Trump indicated potential concessions over the TikTok app deal.

In other news, U.S. property data firm CoStar (CSGP.O) made a revised bid for Australia's Domain Holdings (DHG.AX), causing its shares to fall 4.3%. The bid was at a discount to Domain's most recent closing price of A$4.47.

On the economic front, February inflation data showed easing price pressures across half of the consumer basket, fueling expectations for potential interest rate cuts by the Reserve Bank of Australia. The central bank’s upcoming meeting at the end of March could be a key event for market watchers.

Meanwhile, in New Zealand, the benchmark S&P/NZX 50 index (.NZ50) traded 0.2% lower.