Australia 200 afternoon report: 3 June 2025

The Australia 200 trades 33 points (0.40%) higher at 8447 as of 2.30pm AEST.

Index nears record territory despite geopolitical headwinds

The Australia 200 has extended its rebound from the April low of 7169.2, reaching an intraday high of 8474.9, just 140 points (1.6%) below its record high of 8615 before trimming gains.

Today's rally was built on yesterday's session of resolve, as the Australia 200 held firm above 8400, resisting the temptation to run for cover after several risk-negative headlines hit the wires over the weekend.

Among these, China accused the United States (US) of violating their recent trade agreement, following President Trump's claims last week that China had done the same. Additionally, President Trump announced after markets closed on Friday that tariffs on steel and aluminium imports would double from 25% to 50% by 4 June.

Furthermore, a report from the Atomic Energy Agency (IAEA) indicated that Iran has increased its stockpile of uranium enriched to nearly weapons-grade levels by nearly 50% over the past three months. This development helped push crude oil prices 4% higher during the Asian time zone, in anticipation of a possible response from Israel.

Economic data supports RBA rate cut expectations

In economic news today, headlines focused on the Australian Fair Work Commission announcing a 3.5% increase in national minimum award wages effective 1 July, in line with market expectations and higher than the inflation rate. While this is positive news for workers as it provides a lift to real wages, economists will likely be looking for signs of an associated lift in productivity.

Meanwhile, today's release of the final set of partial inputs ahead of tomorrow's Q1 2025 reading suggests there are some downside risks to the consensus forecast of 0.4% quarter-on-quarter (QoQ) and 1.5% year-on-year (YoY). If correct, this would suggest the economy may fall short of the Reserve Bank of Australia's (RBA) forecasts of 1.8% for June 2025 and 2.1% for December 2025.

Combined with dovish RBA meeting minutes released today, the Australian interest rate market is now assigning an almost 80% chance of a 25 basis points (bp) rate cut from the RBA in July.

Australia 200 stocks

Energy sector

The Australia 200 energy sector, which surged 8.82% last month, gained today taking its cue from the 3.4% rise in crude oil prices this week to $62.85.

• Viva Energy surged 4.53% to $1.90
• Woodside Energy added 1.27% to $22.28
• Beach Energy gained 0.75% to $1.34
• Santos rose 0.54% to $6.52

Financial sector

The Australia 200 financial sector gained 1.0% to 9225, leaving it just 1% shy of its record high of 9322. The big banks have driven the rebound in the financial sector from the April lows, led by Commonwealth Bank of Australia, which has added 2.5 times more value than the next placed National Australia Bank.

• CBA hit a fresh record high today of $177.89 before settling 0.72% higher at $177.70
• Westpac gained 1.5% to $32.66
• ANZ rose 1.17% to $29.33
• NAB rose 0.78% to $38.03

Mining sector

The big miners remain hostage to US-China trade tensions as they attempt to negotiate a deal that satisfies both countries.

• Mineral Resources fell 4.3% to $18.72
• Rio Tinto fell 0.6% to $110.09, on track for its lowest daily close in six weeks
• Fortescue lost 0.1% to $14.98
• BHP edged 0.03% lower to $37.78

Australia 200 technical analysis

Following its impressive recovery from the April 7169 low, the Australia 200 has extended its gains to within 1.4% of its record high. It seems improbable for the index to have come this far without retesting its all-time high of 8615.

As we don't see the grounds for a sustained break of the record high, we will be watching closely for evidence of a double top formation as the precursor to a pullback.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of  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.}