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Australia 200 afternoon report: 1 May 2025

Australia 200 inches higher despite commodity weakness and Chinese manufacturing contraction, as tech stocks surge and investors digest Bank of Japan's cautious outlook.

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The Australia 200 trades 12 points (0.15%) higher at 8138 as of 2.15pm AEST.

Six-day rally continues despite commodity slump

The Australia 200 has started a new month on track for a sixth day of gains, albeit on light trading volumes.

The quiet start to May comes despite US Tech 100 equity futures adding 1.4% following solid earnings reports from Microsoft and Meta, after the close of the United States (US) market. The calm on the Australia 200 is hardly surprising given the stomach-churning rollercoaster ride it endured during April.

At yesterday's close, the Australia 200 signed off on the month of April with a 3.61% gain, 957 points or 13.3% above its 7 April 7169.2 low, which does leave it vulnerable to a pullback in the seasonally weak month of May. As a guide, we typically expect to see a pullback of 3-5% in May, which would take the local bourse back towards the lows of March, 7730 area.

Bank of Japan policy decision

In other news the Bank of Japan (BoJ) kept its short-term interest rate goal at 0.5% as expected. The commentary noted a softer economic and inflation outlook stemming from the uncertainty of US trade policy, which is expected to weigh on growth.

Nonetheless, the BoJ has maintained its underlying stance of raising rates toward neutral in line with its goal of normalising policy. The Japanese rates market is pricing in more than a 50% chance that the BoJ is unable to raise rates again this year.

Chinese manufacturing contraction impacts commodities

Yesterday in China, the National Bureau of Statistics (NBS) manufacturing purchasing managers' index (PMI) fell to 49 in April from 50.5, the largest decline in two years, reflecting the impact of tariffs. This led to significant overnight declines in key commodities.

  • Iron ore declined 1.53% to $96.95
  • Copper futures plunged 5.41% to $4.60
  • Crude oil slipped 3.56% to $58.28, recording an 18.5% loss in April

Australia 200 stocks

Materials sector

Weak commodity prices pressured major miners.

Energy sector

Oil price weakness affected energy stocks:

Banking sector

Technology sector

The ASX200 information technology (IT) sector surged 3.83% to its highest level in almost eight weeks.

International equities sector

Platinum Asset Management surged 11.4% to $0.64 after fund manager L1 Capital acquired a 9.6% stake, sparking merger discussions expected to create significant synergies.

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.

After its strong rebound from the April lows, the Australia 200 is expected to spend months setting into a range broadly between 8200 and 7730.

Australia 200 daily chart

Australia 200 daily chart Source: TradingView
Australia 200 daily chart Source: TradingView
  • Source: TradingView. The figures stated are as of 1 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.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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