Australia 200 afternoon report: 22 May 2025

The Australia 200 trades 46 points (0.56%) lower at 8340 as of 2.15pm (AEST).

The Australia 200 (ASX 200) opened on the back foot this morning, falling 75 points (0.89%) to a low of 8311.4 before bouncing 30 points as United States (US) equity futures steadied following heavy falls on Wall Street overnight.

Impact of Moody's downgrade and tax bill concerns

The sell-off on Wall Street followed a disappointing bond auction, the first since Moody's downgrade, which saw yields on the 30-year Treasury bond climb to around 5.09%, the highest since 2023. This ignited a sell-off in other US assets, including stocks and the US dollar.

The rise in US yields is mainly driven by concerns over the deficit as the US House of Representatives works to pass President Trump's tax bill. Moody's US credit rating downgrade has further intensified these worries.

Should the rise in US yields continue to accelerate higher in the coming sessions, it is likely to put real pressure on equity market valuations, with 4.80% a line in the sand for the US 10-year Treasury, while 5.18% is the level to watch in the US 30-year Treasury.

Australia 200 stocks

Energy sector

Energy stocks have fallen following a volatile ride in crude oil prices. After surging over 3% yesterday to a high of $64.19 on reports that Israel was preparing a strike on Iranian nuclear sites, oil finished the overnight session lower at $61.57 (0.74%). Its retreat was also influenced by reports of new US-Iran nuclear talks scheduled later this week and a surprise increase in US inventories.

• Ampol dropped 2.37% to $25.50
• Woodside Energy declined 1.86% to $21.34
• Santos lost 1.63% to $6.34
• Beach Energy fell 1.33% to $1.30

Property sector

The rise in bond yields weighed heavily on real estate stocks.

• Dexus fell 3.05% to $7.00
• Mirvac Group lost 1.94% to $2.27
• Charter Hall fell 2.08% to $17.92
• Stockland slipped 2.15% to $5.46

Banking sector

A similar story for the big banks as rising bond yields prompted sellers to take advantage of their stunning rebound from the April lows.

• Macquarie Group dropped 2.11% to $205.83
• Commonwealth Bank of Australia fell 1.41% to $172.53
• National Australia Bank slipped 0.81% to $37.34
• Westpac Banking Corporation fell 0.51% to $31.41
• Australia and New Zealand Banking Group bucked the trend, rising by 0.17% to $28.90

Technology sector

• SKS Technologies Group surged 21.57% to $1.86 after winning a new $100 million data-centre contract
• Sports tech company Catapult Group International gained 7.06% to $5.23 following its full-year earnings report, which showed a 19% increase in revenue to US$116.5 million
• Zip Co Limited dived 7.50% to $1.85 as higher yields put pressure on its business model.

Gold miners

The allure of gold in these most uncertain of times remains obvious to see as it extended its rebound today above $3345.

• Northern Star Resources rose 4.86% to $20.15
• Newmont Corporation added 2.67% to $83.31
• Regis Resources climbed 1.68% to $3.33

Elsewhere, Nufarm fell 9.96% to $2.53, extending a 30% decline from yesterday after a weak trading update showing a 39% drop in statutory net profit after tax to $29.8 million. 

Australia 200 technical analysis

From its mid-February record high of 8615, the Australia 200 fell 16.78% to its early April 7169 low, a move which had more corrective than impulsive characteristics.

After rebounding from the April low to within 2.2% of its record high, and despite recent developments on the trade front, our preferred scenario remains for a period (weeks) of consolidation/range trading. This will likely be in a higher range (8400 - 7950) than what we suggested at the end of last month (8200 - 7730).

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 22 May 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}