ASX closes at six-week high following Trump’s inauguration, dollar tanks as markets factor in tariffs

The Australian sharemarket closed at a six week high on Tuesday on a volatile trading day after President Trump’s inauguration. The Australian sharemarket closed 55 points higher or up 0.66 per cent to 8402.4. While this is a six week high for the local market, it pared back much of the gains from the morning, where it rose by more than 1 per cent. The broader All Ordinaries rose 58.30 points or 0.68 per cent to close Tuesday’s trading at 8652.70. In a mixed day for the Aussie dollar – where it initially surged 1.4 per cent on Tuesday morning, only to spiral back down during the afternoon’s trading. Currently, the dollar is trading around US62.43c. The Aussie dollar fell after President Donald Trump says he’s thinking in terms of 25 per cent tariffs on Canada and Mexico. “We’re thinking in terms of 25 per cent on Mexico and Canada,” Trump told reporters after his inauguration. “I think we’ll do it on February 1st.” Seven of the 11 sectors finished higher, led by financial, consumer cyclicals and basic metals. BHP rose 0.92 per cent to 40.61, Fortescue jumped 1.10 per cent to $19.37 and Rio Tinto finished in the green up 0.43 per cent to $120.61 as Singapore iron ore futures rose 1.3 per cent to a more than two-month high of US$105.15 a tonne. Commonwealth Bank closed 0.7 per cent higher at $156.20. National Australia Bank advanced 2.1 per cent to $38.87, ANZ lifted 2 per cent to $30.15 and Westpac rose 1.39 per cent to $32.74 on an overall strong day for the banking sector. Wesfarmers rose 1.6 per cent after winding down its Catch business, which is set to report an operating loss of up to $40 for the first half of the 2024-2024 financial year. It says 190 people will lose their jobs Wesfarmers managing director Rob Scott said the decision was in the best interests of shareholders and would better leverage the assets and capabilities developed within Catch. “While Catch’s financial performance has been challenging, we have gained valuable insights and capabilities that have accelerated the group’s digital transformation and supported the development of the OnePass membership program,” Mr Scott said. Shares in online retailer Kogan had a strong session on the Catch news, up 5.53 per cent to $5.92. The day was led by the lithium miners with Liontown Resources leapt 11.9 per cent to $0.71 after output tripled in the December quarter, to lead all stocks on the ASX 200. The smaller Core Lithium soared 16.67 per cent to finish the day at $0.10. Shares in Tabcorp fell 4.412 per cent to $0.650 and John Lyng Group fell 3.84 per cent to $3.75.