Volatility continues on the market today and are likely to give up yesterday’s gains. ASX 200 futures are down 116pts (-1.52%) as of 8:30 am AEST.
Yesterday, the S&P/ASX200 Index surged 334 points, or 4.54%, to close at 7,709, with the rally led by Information Technology (+7.57%), Materials (+6.32%) and Energy (+5.16%) sectors. Despite the broad-based recovery, Consumer Staples (+1.88%), Telecommunications (+2.95%) and Industrials (+3.50%) lagged the broader market.
In a volatile session, the benchmark index soared 467 points, or 6.3%, in early trading, reaching an intraday high of 7,842.9 before closing 133 points lower as investors locked in profits. The session marked a significant 673-point, or 9.3%, rebound from Monday’s low of 7,169.2.
Remarkably, the index ended the week up 0.55%, recovering from earlier losses amid heightened trade tensions. The sharp turnaround followed news that United States President Donald Trump would delay the implementation of several new tariffs by 90 days, although he simultaneously raised existing tariffs on Chinese imports to 145%. The announcement triggered a relief rally on Wall Street, which flowed through to Australian equities.
Shares in major mining and technology companies led sharp gains on the Australian Securities Exchange, with Mineral Resources Limited soaring 18.13% to A$17.01. Rio Tinto rose 6.35% to A$110.59, BHP Group added 5.39% to A$36.00, and Fortescue Metals Group climbed 6.2% to A$115.08.
Local technology stocks rallied strongly following a 12.1% surge in the tech-heavy Nasdaq overnight. Zip Co advanced 20.66% to A$1.46, Block Inc – the owner of Afterpay – jumped 13.3% to A$89.48, Megaport gained 11.6% to A$10.00, and Life360 lifted 10.85% to A$19.11.
The major banks also contributed significantly to the index’s strength. Macquarie Group led the financials, rising 5.48% to A$180.34. Westpac increased 4.94% to A$30.61, National Australia Bank climbed 4.87% to A$33.82, ANZ advanced 3.47% to A$27.43, and Commonwealth Bank added 3.61% to A$154.43.
“Following this week's ratchet-up in trade tensions between the US and China, many banks have moved to lower their forecasts for China’s GDP, raising expectations that Chinese authorities will accelerate moves to boost the Chinese economy. This would most likely be via stimulus measures to boost consumption and perhaps the property market,” IG Markets analyst Tony Sycamore said.
The Australian interest rate market has fully priced in a 25 basis point rate cut by the Reserve Bank of Australia (RBA) in May. Markets are now expecting a cumulative 119 basis points in reductions by year-end, which would see the official cash rate fall to 2.85%.
Wall Street retreats as tariff tensions resurface and recession fears mount
Wall Street’s volatile week continued, with US equities giving back a portion of Wednesday’s relief rally amid renewed concerns over trade tensions with China and the risk of recession.
Investor sentiment was further unsettled by a clarification from the White House, which confirmed that total tariffs imposed on Chinese imports by President Donald Trump amount to 145%. This figure includes a previously unaccounted 20% tariff linked to China’s role in the fentanyl trade, in addition to the 125% reciprocal tariffs announced earlier.
Meanwhile, a softer-than-expected US consumer price index (CPI) print offered some relief, with the core measure easing to 2.8% year-on-year from 3.1%. However, US Treasury Secretary Scott Bessent downplayed market dislocations, citing “good inflation numbers, lower oil prices, and a successful bond market” as signs of stability, despite a 13 basis point rise in the 30-year yield to 4.42% and a sharp pullback in equities.
Bessent also warned that delisting Chinese companies from US exchanges remains under consideration, stating, “Everything is on the table.”
Looking ahead, markets will be closely watching for any further tariff developments, as well as corporate earnings from key financial institutions including JP Morgan, Wells Fargo, Citigroup, and Blackrock. The preliminary April reading of the University of Michigan consumer sentiment index is forecast to decline five points to 52.0 – marking a fourth consecutive monthly fall – with particular focus on its inflation expectations component.
The US interest rate market is now fully priced for a 25 basis point Federal Reserve rate cut in June, with 87 basis points in total cuts anticipated by year end.
European markets surge on tariff reprieve
European sharemarkets rallied strongly on Thursday, buoyed by a temporary easing in trade tensions after the European Union announced a 90-day suspension on new counter-tariffs.
Investor sentiment lifted across the board, with Banks and Financial Services, Industrials, and Technology stocks leading gains. All major sectors closed higher, with Barclays, Deutsche Bank, Anglo American, and SAP each advancing more than 7%.
- The broader FTSEurofirst 300 index climbed 3.8%.
- London's FTSE 100 index gained 3.2%, marking its strongest single-day performance in five years.
Currency moves
Currency markets also saw notable moves, with the US dollar weakening as traders reduced exposure to the Greenback.
- The euro climbed from US$1.0943 to as high as US$1.1241, closing near US$1.1202.
- The Australian dollar strengthened from US62.00 cents to US62.49 cents before easing slightly to US62.30 cents.
- The Japanese yen appreciated from 146.50 to JPY144.02, ending near JPY144.70.
Gold hits record high amid trade tensions
Gold prices surged, with futures climbing US$98.10 or 3.2% to US$3,177.50 an ounce, as investors sought safe-haven assets amid escalating US-China trade tensions. Spot gold was trading near US$3,175 at the US close.
Iron ore futures firmed US84 cents or 0.8% to US$99.89 a tonne as markets assessed the potential impact of Chinese stimulus measures in response to growing tariff pressure from the United States.
Global oil prices slumped on renewed demand concerns after the US Energy Information Administration revised its 2025 forecast. Global demand growth is now projected at 900,000 barrels per day, down 400,000 from last month’s estimate.
- Brent crude dropped US$2.15 or 3.3% to US$63.33 per barrel.
- US Nymex crude fell US$2.28 or 3.7% to US$60.07 per barrel.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) gained 6.38% to finish at 2,926.90 yesterday. It’s not faring too badly over the week considering the volatility, down 1.12% over the past five days.
You can read about the following and more on the small cap front throughout the day:
- Cobalt Blue Holdings Ltd has signed a binding pre-Final Investment Decision (FID) Consortium Deed with Iwatani Australia Pty Limited, marking a significant step toward the development of the Kwinana Cobalt Refinery (KCR) in Western Australia. The Deed sets out the framework under which the parties will jointly progress the Project to FID. If advanced, KCR is expected to become Australia’s first cobalt refinery, supplying high-quality, battery-grade cobalt sulphate to the global battery materials market. The base case for stage one plant capacity is currently anticipated at 3,000 tonnes per annum (tpa) of cobalt, either as cobalt sulphate or metal.
- Riversgold Ltd has reported assay results from the final four reverse circulation (RC) drill holes of an 11-hole, 1,289-metre program at the Northern Zone Intrusive Hosted Gold Project, situated 25 kilometres east of Kalgoorlie. An additional 1,303 samples from a recently completed 1,805-metre vertical drill program have been submitted, with results expected in the coming weeks.
- Lindian Resources Ltd has commenced early-stage site works at its flagship Kangankunde Rare Earths Project, a critical milestone in the development of one of the world’s most significant undeveloped rare earth assets.