Despite the war of words between the Coalition and Labor over Trump’s tariffs, the ASX is set to rise this morning. ASX 200 futures are up 18pts (+0.23%) as of 8:30 am AEDT.
“It’s obvious that Anthony Albanese and Kevin Rudd have had a shocker,” Opposition leader Peter Dutton told reporters in Brisbane.
“The Prime Minister can’t secure a phone call, let alone a meeting with the President of the United States.
Meanwhile Prime Minister Anthony Albanese criticised Trump’s actions.
This is against the spirit of our two nations’ enduring friendship and fundamentally at odds with the benefit of our economic partnership that has delivered over more than 70 years,” he said.
“Australia has no tariffs on goods from the United States and, of course, we have a free trade agreement with the United States.
“Our government will continue to put forward a very strong case for an exemption, noting that the last time this occurred it took months for that exemption to be granted.”
The ASX200 closed 103 points lower (-1.32%) yesterday at 7,786, weighed down by declines in the Consumer Discretionary (-2.02%), Industrials (-1.88%), and Financials (-1.60%) sectors. In contrast, Utilities (+0.02%), Real Estate (-0.29%), and Telecommunications (-0.44%) outperformed the broader market.
The index experienced another sharp sell-off, dropping 156 points (-1.9%) in early trade and officially entering correction territory, having fallen 882 points (-10.2%) from its 8,615 high on 14 February. This correction, unfolding in less than four weeks, has erased approximately A$270 billion from the local market's capitalisation.
“Yesterday’s decline followed another tumultuous session on Wall Street, marked by new tariff threats from US President Trump and the confirmation that Australia would not be exempt from Trump's 25% tariffs on steel and aluminium. While the direct impact of US tariffs on Australian steel and aluminium may be limited, there are concerns that Australia's major exports to the US, meat and pharmaceuticals could soon be in the tariff firing line,” IG Markets analyst Tony Sycamore said.
“When looking for a potential base, there are two things we would like to see. Firstly, a capitulation-type low where the market sells off aggressively, perhaps due to forced margin selling and then closes higher on the day. Secondly, the big banks/ Financial sector are crucial to any recovery and should be watched closely for signs that buying is returning to the space.
“The rates market is pricing in 18bp of RBA rate cuts for May, with a cumulative 62bp of RBA rate cuts priced for the remainder of 2025.”
China mixed, Japan advances
Chinese markets ended mixed, with the Shanghai Composite Index down 0.2% at 3,371.92, while the Shenzhen Composite Index edged up 0.1% to 2,090.38.
Hong Kong’s Hang Seng Index dropped 0.8% to 23,600.31.
Japanese stocks advanced, as the Nikkei Stock Average rose 0.1% to 36,819.09.
India’s BSE SENSEX declined 0.1% to 74,029.76.
Mixed results in the US
US stocks closed mixed, with the Dow Jones Industrial Average (DJIA) declining 0.2% to 41,350.93. The S&P 500 advanced 0.5% to 5,599.30, while the Nasdaq Composite gained 1.2% to 17,648.45.
Among S&P 500 constituents, Tesla Inc (TSLA) led the gainers, surging 7.59%, followed by Micron Technology Inc (MU), which climbed 7.40%, and Palantir Technologies Inc (PLTR), up 7.17%.
On the downside, Dollar Tree Inc (DLTR) fell 5.74%, Erie Indemnity Co (ERIE) declined 5.54%, and Brown-Forman Corp (BF.B) lost 5.08%.
“Headline CPI in February rose by 0.2% MoM, which allowed the annual rate to ease to 2.8% YoY from 3% prior. Core inflation also rose by 0.2% MoM, which saw the annual rate ease to 3.1% from 3.3% prior. It was the core measure's lowest reading since April 2021. Notably, the shelter component rose 4.2% over the last year, the least since December 2021 and down from 4.4% in January,” Sycamore noted.
“In tariff news, President Trump's steel and aluminium tariffs came into effect yesterday, prompting Canada and Europe to announce retaliatory tariffs. Trump has vowed to respond to the retaliatory tariffs.
Europe aims higher
UK stocks ended higher, with the FTSE 100 Index rising 0.5% to 8,540.97.
Broader European markets also gained, as Germany’s DAX advanced 1.6% to 22,676.41 and France’s CAC 40 rose 0.6% to 7,988.96.
Currencies and commodities
US 10-year bond yields have risen to 4.314%, reflecting ongoing shifts in market sentiment. Meanwhile, oil prices have also edged higher, with global benchmark Brent crude trading at US$70.97 per barrel and West Texas Intermediate (WTI) Nymex at US$67.70.
Gold futures have climbed to US$2,940.79 per ounce, continuing their upward trend. In the cryptocurrency market, bitcoin remains strong, trading above US$83,000.
On the currency front, the Australian dollar is hovering around US$0.6319.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) dropped 0.90% to finish at 2,959.70 yesterday. Over the past five trading days, the index has lost 3.87%.
News is trickling in this morning, but you can read about the following and more throughout the day.
- Anteris Technologies Global Corp has released its financial results for the full year ended December 31, 2024, along with a corporate update. The company completed a US Initial Public Offering (IPO) on Nasdaq, raising US$88.8 million (A$139.3 million) before costs and commissions, excluding the underwriters' option. The IPO finalised the company’s re-domiciliation to the United States.
- Ionic Rare Earths Ltd has progressed its strategy for net-zero magnet rare earths production through its wholly owned subsidiary, Ionic Technologies. A peer-reviewed Product Carbon Footprint analysis by Minviro Ltd. for its planned Belfast magnet recycling plant has shown up to a 61% reduction in CO₂ emissions. The findings underscore the plant’s potential to significantly lower Scope 3 emissions in the original equipment manufacturer (OEM) supply chain compared to primary rare earth oxide (REO) sources from mining.
- Ora Banda Mining Ltd has reported further exploration success at the Riverina Gold Camp. Following the discovery of high-grade gold mineralisation in the initial Little Gem EIS diamond drill hole (LGDD24001: 4.7 metres at 7.4 grams per tonne gold), the company has completed a five-hole diamond drilling program totalling 1,849 metres. The results confirm the presence of the carbonate host units over a 1,600-metre strike length and to a depth of 400 metres below surface.