SYDNEY, Jan 21, 2026, 11:00 (AEDT)
- Australia’s ASX 200 dips at the open, while miners gain ground on soaring bullion prices
- Trump warns of fresh tariffs targeting eight European nations amid Greenland spat
- Lynas surges as prices climb; Rio Tinto and BHP deliver robust iron ore production numbers
Australian shares slipped on Wednesday, though the drop was milder than futures had predicted as miners benefited from a record gold price. By 10:30 a.m. AEDT, the S&P/ASX 200 was down 0.4% at 8,779. Tech, banks, and industrials lagged, while materials and energy sectors gained ground. Spot gold hovered near $4,762 an ounce, Brent crude around $64 a barrel, and the Australian dollar stayed close to 67.3 U.S. cents. 1
The selloff followed a global slide, with the S&P 500 dropping roughly 2% overnight and Europe’s STOXX 600 down 0.7%, as investors reacted to new trade threats from U.S. President Donald Trump. “The geopolitical risks … are re-emerging and are shifting market perceptions of common alliances across allies in Europe,” said Wasif Latif, chief investment officer at Sarmaya Partners. Strategists are bringing back the term “sell America,” a quick way to describe reducing holdings in U.S. stocks and the dollar amid rising policy risks. 2
Trump has threatened to impose new tariffs on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain after these countries deployed small military contingents to Greenland at Copenhagen’s request. The tariffs would kick in at 10% starting Feb. 1, then jump to 25% on June 1, and remain until the U.S. secures a deal to buy Greenland, according to Sweden’s Board of Trade. 3
European shares hit their lowest level in almost two weeks before closing 0.7% down on Tuesday, with Germany’s DAX falling 1%. Deutsche Bank analysts, led by Jim Reid, said markets have priced in some reaction but there’s potential for bigger swings if the rhetoric heats up, especially with Trump set to speak at the World Economic Forum in Davos. 4
Some investors remain skeptical the White House will act, and a shift to a softer stance could quickly soothe markets. “Geopolitical tensions have dented sentiment and cooled early-year exuberance, but they haven’t fundamentally altered the global growth or earnings outlook,” said Laura Cooper, senior macro strategist at Nuveen. 5
In Australia, the risk-off sentiment was clear in the sector split: defensive stocks fared better, while growth names took another hit.
Lynas Rare Earths surged following a 43% jump in second-quarter revenue to A$201.9 million. The boost came from higher prices, which made up for reduced output after power issues at its Kalgoorlie plant in Western Australia. Rare earths are metals essential for electric vehicles, smartphones, and some defense systems. 6
Rio Tinto posted record iron ore shipments for the fourth quarter from its Pilbara mines, moving 91.3 million tonnes and surpassing analyst expectations. The miner also saw a rise in copper production, driven by its Oyu Tolgoi ramp-up, positioning it ahead of rival Vale. Meanwhile, Rio Tinto is engaged in early takeover discussions with Glencore. 7
Peer BHP reported a record 146.6 million tonnes of iron ore output in the first half from Western Australia. However, it acknowledged accepting lower prices on some sales amid talks for a 2026 supply deal with China’s state buyer. RBC Capital Markets analyst Kaan Peker noted that restrictions on Chinese purchasing could tighten spot market supply and bolster the benchmark price, despite BHP facing steeper discounts. 8
On the ASX, the looming question is straightforward: will tariff threats become reality, and what will Europe do next? Traders say until that’s settled, safe-haven buying and volatile intraday moves are likely to persist.
