The ASX will dip today after US losses.
Yesterday, the S&P/ASX 200 Index rose for a fifth consecutive session on Wednesday, adding 56 points or 0.71% to close at 7,999. Gains were led by Real Estate and Consumer Staples, both up 1.19%, followed closely by Industrials, which rose 1.11%. Health Care dipped 0.53%, while modest gains in Energy (0.13%) and Information Technology (0.15%) lagged the broader market.
Investor sentiment was buoyed by Wall Street’s positive lead and a softer-than-expected Australian inflation print. The Monthly Consumer Price Index (CPI) rose 2.4% year-on-year in February, easing from 2.5% in January and matching consensus forecasts. The trimmed mean inflation measure also eased to 2.7% from 2.8%.
With a slowing global growth outlook, subdued wages and employment data, and now a benign inflation reading, expectations are firming that the Reserve Bank of Australia (RBA) will keep the cash rate on hold at 4.1% at its next meeting. Markets are currently pricing in a 25 basis point cut in May, contingent on first-quarter inflation data due on 30 April.
Among notable moves, Paladin Energy fell 11.58% to A$5.65 after suspending operations at its Langer Heinrich Mine in Namibia due to unseasonal rain. Vulcan Energy Resources jumped 12.84% to A$5.36 after its geothermal lithium project was designated a “Strategic Project” by the European Union. ANZ Banking Group recovered 2.97% to A$29.44 following losses on Tuesday afternoon.
Markets digest US auto tariffs
US equity markets broke a three-day winning streak after Donald Trump confirmed a 25% tariff on all cars not manufactured in the United States, effective 2 April. The policy, expected to raise US$100 billion annually, triggered modest early moves in global markets. S&P 500 futures edged down 0.26% to 5,745, the euro slipped to 1.0736 against the US dollar, and the Australian dollar fell to 0.6288.
Minneapolis Federal Reserve President Neel Kashkari voiced concerns the tariffs could lift inflation and prompt higher interest rates. Meanwhile, US durable goods orders rose 0.9% month-on-month, defying forecasts of a 1% decline.
The so-called “Flagging 7” mega-cap stocks all declined, led by Nvidia (-5.74%), Tesla (-5.58%) and Meta (-2.45%).
Markets now turn to initial jobless claims and the key Core Personal Consumption Expenditures (PCE) Price Index data due Friday. Futures are pricing in 19 basis points of Federal Reserve cuts in June and 63 basis points over 2025.
European markets mixed as auto sector tumbles
European sharemarkets ended mixed on Wednesday, with the auto and parts sector declining by 2.6% as markets braced for potential new United States import tariffs. Energy stocks rose 1.4%, supported by higher crude oil prices.
In macroeconomic news, UK consumer prices increased by 2.8% in the year to February, easing from January’s 3% annual rise and below the expected 3%. Meanwhile, UK Chancellor of the Exchequer Rachel Reeves reduced the government’s proposed spending increases.
- The continent-wide FTSEurofirst 300 index fell 0.7%.
- London’s FTSE 100 index gained 0.3%.
Currencies weaken, oil and base metals rise
Currencies
Currency markets weakened against the US dollar.
- The Euro declined from US$1.0801 to US$1.0743 and was near US$1.0750 at the US close.
- The Australian dollar eased from US63.29 cents to US62.82 cents, stabilising near US62.90 cents.
- The Japanese yen slipped from 150.01 yen to JPY150.74, trading around JPY150.55 at the close.
Commodities
Oil prices climbed after United States government data revealed a larger-than-expected drawdown in crude inventories. Stocks dropped by 3.3 million barrels to 433.6 million barrels, against forecasts for a 956,000-barrel decrease. Brent crude rose US77 cents or 1.1% to US$73.79 per barrel, while West Texas Intermediate (WTI) crude added US65 cents or 0.9% to US$69.65 per barrel.
Base metals gained ground, with copper futures up 0.6% amid speculation of possible new US tariffs, reaching a record high. Aluminium futures rose 0.3%.
- Gold retreated as the US dollar and bond yields advanced, with futures down US$3.40 or 0.1% to US$3,022.50 an ounce. Spot gold was near US$3,018 at the US close.
- Iron ore futures edged up US7 cents or 0.1% to US$102.25 per tonne, supported by seasonal demand despite Chinese steel production curbs.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) gained 0.46% yesterday to close at 3,074.30. Over the past five days it has gained 1.59%.
There’s been a few announcements this morning and you can read about the following and more throughout the day.
- Far East Gold Ltd will undertake an extensive drilling program at the Idenburg gold project in Papua. A total 3,670m, 32-hole diamond drill programme is planned to build upon the reported 540,000oz @ 4.1 g/t JORC- compliant inferred gold resource at the Company’s Idenburg project.
- Silver Mines Ltd has started diamond drilling at the Bowdens Silver Deposit. The Bowdens Silver Project, located 26 kilometres east of Mudgee in Central New South Wales.
- Brookside Energy Ltd has provided its year end 2024 (FY2024) reserve update as independently assessed by Haas & Cobb Petroleum Consultants (Haas & Cobb) with an effective date of January 1, 2025.