ASX Gains Amid Miners’ Downturn as Tariff Talks Intensify

January 22, 2025 11:02 AM AEDT | By Team Kalkine Media

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ASX Gains Amid Miners’ Downturn as Tariff Talks Intensify — Image source: shutterstock

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Highlights

ASX gains amid mixed sector performance and tariff discussions.

Mining stocks face sharp declines on tariff concerns.

Technology stocks and Bitcoin see notable rises.

The Australian Securities Exchange (ASX) witnessed modest gains on Wednesday despite significant pressure on the mining sector. The S&P/ASX 200 climbed 0.2%, adding 19.6 points to close at 8422. Strong performance in technology and consumer discretionary sectors provided a boost, reflecting a degree of optimism among investors.

The uplift in the broader market coincided with fresh comments from U.S. President Donald Trump. He revealed consideration of a 10% tariff on China, citing concerns related to the flow of fentanyl. This came on the heels of earlier tariff proposals targeting Mexico and Canada, with rates as high as 25% potentially implemented as early as next month.

Miners Face Heavy Selling Pressure

Trump's tariff comments coincided with sharp declines in major Australian iron ore exporters. Shares of BHP Group (ASX:BHP) dropped 1.4%, while Fortescue Metals Group (ASX:FMG) slid by 1.5%. Other miners saw steeper losses, with Pilbara Minerals (ASX:PLS) tumbling 2.7% and Santos Limited (ASX:STO) slipping by 1.1%.

Energy stocks also faced headwinds. Woodside Energy (ASX:WDS) saw a 2.5% drop, despite reporting record output for 2024. Seasonal demand led to a 3% decline in production during the latest quarter. Iluka Resources (ASX:ILU) plunged 8.3%, driven by profit-taking following strong performance. The company had reported a 23.7% increase in output for the December quarter, exceeding full-year guidance.

Technology Stocks and Bitcoin Rise

Amid the sell-off in mining and energy, technology stocks outperformed, supported by improved risk appetite. Wisetech Global (ASX:WTC) edged 1% higher, NextDC (ASX:NXT) jumped 1.9%, and TechnologyOne (ASX:TNE) advanced by 1.7%.

The upbeat sentiment extended to cryptocurrency markets, with Bitcoin surging 3.9% to $106,014 (USD). The risk-on momentum provided relief for investors in this high-volatility asset class.

Notable Movements

Paladin Energy (ASX:PDN) rose 6% despite reporting lower production at its Langer Heinrich Mine for the December quarter, which aligned with prior expectations. Meanwhile, traders focused on diverse sectoral trends as volatility persisted across the ASX.

In conclusion, the ASX ended the day in positive territory, buoyed by gains in select sectors despite ongoing tariff discussions weighing on market sentiment, particularly in the mining sector.

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