Australia 200 afternoon report: 29 April 2025

The Australia 200 trades 77 points (0.97%) higher at 8074 as of 2.15pm AEDT.

Barring a dramatic sell-off in the last hours of today's trading session, the Australia 200 is set to close above 8000 for the first time in almost eight weeks.

Trump tariff adjustments boost market sentiment

The driver of today's gains is reports that President Trump will reduce the impact of automotive tariffs by easing duties on foreign-made parts in United States (US)-made cars to prevent tariff stacking.

Faced with elevated market volatility, dismal opinion polls, industry pressure, potential supply chain issues, and the threat of retaliation and stagflation, it would be another step by President Trump to scale back elevated tariffs.

Prior moves include President Trump offering a 90-day pause on reciprocal tariffs for non-retaliating countries, US-Mexico-Canada Agreement (USMCA) exemptions, significant tariff reductions on Chinese goods, and a pause on consumer electronics tariffs.

While US 500 equity futures have responded with a modest rise of 0.14%, the Australia 200 has seen a much stronger response, supported by end-of-month flows and investors forced to chase the rally after missing the best part of its impressive 900-point rally from the 7169 low it struck earlier this month.

Inflation data and RBA outlook

Staying on the subject of lower interest rates, tomorrow sees the release of first quarter (Q1) 2025 inflation data. The expectation is for headline inflation to rise by 0.7% quarter-on-quarter (QoQ) for an annual rate of 2.3%. The trimmed mean is expected to rise by 0.6% QoQ, which would see the annual rate ease to 2.8% from 3.2% in fourth quarter (Q4).

This will mark the first time year-ended inflation will be within the Reserve Bank of Australia's (RBA) 2 - 3% target band since the fourth quarter (Q4) 2021. Given the downside risks to global growth and softer near-term inflation profile, we expect the RBA to cut rates by 25 basis points (bp) at its meetings in May and July.

Australia 200 stocks

Energy sector

• Beach Energy surged 4.53% to $1.21 following the release of its quarterly update, which reported production and revenues up strongly from the prior corresponding period
• Santos advanced 2% to $6.13
• Ampol rose 1.81% to $23.04
• AGL Energy climbed 1.6% to $10.71

Mining sector

• Mineral Resources soared 14.63% to $20.80 following its quarterly update after management said that an equity raising would not be required
• Fortescue Metals Group jumped 4.6% to $16.19 as quarterly shipments increased 6%
• Rio Tinto added 1.6% to $116.85
• BHP Group gained 1.43% to $38.20

Real estate sector

The tariff-free real estate sector extended its gains as investors seek opportunities in a lower-growth and lower-interest-rate world where Real Estate Investment Trust (REIT) returns become all the more attractive.

• Goodman Group climbed 1.8% to $29.49
• REA Group increased 1.5% to $246.42
• Scentre Group rose 1.42% to $3.58

Australia 200 technical analysis

From its mid-February high of 8615, the Australia 200 fell 16.78% to its early April 7169 low, a move viewed as a correction rather than the onset of a new bear market.

Following its strong rebound from the April lows, we expect the Australia 200 to spend some time (months) consolidating broadly in a range between 8200 and 7650.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 29 April 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.}