The ASX is eyeing a positive start to the week, with ASX 200 futures pointing to a 1.1% rise at the open at 7867 points after a positive close on Wall Street on Friday.
The ASX 200 declined 158 points (-1.99%) last week to close at 7,789, marking its fourth consecutive weekly loss and entering correction territory following a 10.2% pullback from its 14 February peak. The downturn was driven by concerns over higher inflation and slower growth, exacerbated by uncertainty surrounding US trade policies.
Among sectors, Information Technology (-4.35%), Health Care (-3.53%), Consumer Discretionary (-3.28%), and Financials (-3.14%) recorded the steepest losses. Meanwhile, Utilities (+3.23%), Energy (+3.23%), and Materials (+0.51%) were the only sectors to post gains.
On the stock front, City Chic Collective (-14.81%), Audinate (-13.60%), Helloworld (-13.29%), and Johns Lyng (-11.43%) saw significant declines. Conversely, DroneShield (+23.86%), Regis Resources (+11.25%), Novonix (+9.64%), and Evolution Mining (+7.81%) delivered strong gains.
“Last month (January), the Australian economy added 44,000 jobs, beating market forecasts of a 20,000 gain. The unemployment rate edged higher to 4.1% from 4% as the participation rate hit a new record high of 67.3%,” noted IG Markets analyst Tony Sycamore.
“The robust jobs report came two days after the RBA cut interest rates for the first time since November 2020. In the accompanying statement, the RBA noted, ‘Labour market conditions remain tight and tightened a little further in late 2024. Measures of labour underutilisation have declined, and business surveys suggest that labour availability remains a constraint for many employers’.
“A stronger-than-expected jobs report this week will likely ensure the RBA keep rates on hold at its April meeting and wait for softer Q4 inflation and labour market data to trigger a rate cut in May. The preliminary expectation for this month (February) is that the Australian economy will add 20,000 jobs and the unemployment rate will remain at 4.1%. The Australian interest rate 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.”
US volatility
US stock markets ended a volatile week with a relief rally on Friday, as a combination of positive developments outweighed a disappointing University of Michigan Consumer Sentiment report. Despite Friday’s gains, the S&P 500 declined 2.27% for the week, the Nasdaq fell 2.46%, and the Dow Jones lost 1,313 points or 3.1%, marking its worst weekly performance since March 2023.
Market sentiment began improving during the Asian session on Friday after Senate Minority Leader Chuck Schumer signalled support for a Republican-backed funding bill, easing concerns over a potential government shutdown. Further optimism followed a Chinese government announcement of an upcoming press conference on Monday expected to outline consumption-boosting measures. Additionally, an agreement among German political parties on a new fiscal deal to support defence spending and economic growth contributed to the improved outlook. Even a sharp drop in the University of Michigan Consumer Sentiment Index to 57.9—its lowest level since November 2022—failed to halt the rally.
Technology stocks led the rebound, with Nvidia surging 5.3% to US$121.67 and Tesla rising 3.86% to US$249.98, though still below its 200-day moving average of US$282.68. Palantir jumped 8.3% to US$86.24 but remained 30% below its February high of US$125.41.
Looking ahead, investors will focus on Monday’s US retail sales data and Thursday’s Federal Open Market Committee (FOMC) meeting. The Retail Control Group is expected to rise 0.3% in February after a 0.8% decline in January, with a negative print likely reinforcing concerns about economic slowdown. The Federal Reserve is expected to keep interest rates unchanged at 4.25%–4.50%, with projections indicating two more 25-basis-point cuts in 2025. The US rates market is currently pricing in a 25-basis-point Fed rate cut in June and a total of 69 basis points in cuts for the year.
Euro rally
European sharemarkets rallied on Friday, with German equities leading the gains, rising 1.9% after the country’s political parties reached a historic agreement to increase state borrowing. European banks advanced 2.2%, while the industrial goods sector, which includes defence stocks, also gained 2.2%.
- The continent-wide FTSEurofirst 300 index rose 1.1% but declined 1.4% over the week.
- In London, the UK FTSE 100 index also climbed 1.1% but edged 0.5% lower for the week.
Currencies and commodities
Currencies
Currencies strengthened against the US dollar in European and US trade.
- The euro appreciated from US$1.0831 to US$1.0910, settling near US$1.0880 at the US close.
- The Australian dollar lifted from US62.89 cents to US63.30 cents, trading near US63.25 cents at the US close.
- The Japanese yen firmed from 149.02 per US dollar to JPY148.27, before closing near JPY148.60.
Commodities
Global oil prices gained 1% on Friday as investors reassessed the likelihood of a swift resolution to the Ukraine war, which could impact Russian energy supplies to Western markets.
- Brent crude rose US70 cents, or 1%, to US$70.58 per barrel.
- US Nymex crude added US63 cents, or 0.9%, to US$67.18 per barrel.
Both benchmarks ended the week largely unchanged, up 0.2%-0.3%.
Base metal prices fell on Friday, with copper futures down 0.6% as weaker Chinese loans data dampened demand. Aluminium futures slipped 0.8%. Over the week, copper gained 4%, while aluminium declined 1.4%.
Gold prices extended their historic rally, with futures rising US$9.80, or 0.3%, to US$3,001.10 an ounce as investors sought safe-haven assets amid economic uncertainty tied to US President Donald Trump's tariff policies. Spot gold traded near US$2,984 at the US close after reaching an all-time high of US$3,004.86. The metal surged 3% over the week.
Iron ore futures gained US69 cents, or 0.7%, to US$102.85 per tonne on Friday, supported by steady demand and expectations of further stimulus measures in China. Iron ore advanced 1.5% over the week.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) finished last week on a high, gaining 1.33% to finish at 3,004.30 However, it was still 1.68% down on the week.
News is coming in at even pace this morning and you can read about the following and more throughout the day.
- Lindian Resources Ltd has strengthened its core leadership team with key senior appointments, enhancing its capability to unlock value, advance project funding, and drive the delivery of the Kangankunde Rare Earths Project in Malawi. The expanded leadership team will also focus on developing and optimising Lindian’s bauxite portfolio.
- Altech Batteries Ltd has secured BimSch-G approval, an environmental and construction permit, for its 120 megawatt-hour (MWh) CERENERGY® GridPack production facility in Saxony, Germany. This approval enables Altech’s joint venture subsidiary, Altech Batteries GmbH, to proceed with site clearing and construction, contingent on securing project funding.
- archTIS Ltd, a provider of data-centric software solutions for secure collaboration, has completed the acquisition of Direktiv’s technology assets, employees, and customer base. The acquisition expands archTIS’ capabilities in automation and secure information management.
- Astral Resources NL has reaffirmed its off-market takeover bid to acquire all remaining ordinary shares of Maximus Resources Ltd. Astral has declared the offer consideration as best and final, confirming it will not be increased. The offer remains unconditional, with accelerated payment terms, and is set to close at 7:00 pm (AEDT) on Friday, March 21, 2025, unless extended. As of 14 March 2025, Astral has secured majority control of Maximus, with voting power of 81.67%. With its ownership now exceeding 80%, Maximus shareholders may be eligible for rollover tax relief.
- Peninsula Energy Ltd and its wholly owned U.S. subsidiary, Strata Energy Inc., have appointed Jitu Bhudia as Chief Financial Officer (CFO).