The Australia 200 gained despite low trading volumes and trade uncertainties, led by strong performances in technology, real estate, and travel sectors. Bank sector shifts and AUD/USD impacts are key areas of focus for investors.
Written by
Market Analyst
The Australia 200 trades 1 point (0.02%) higher at 8543 as of 2.40pm AEST.
The Australia 200 (ASX 200) began the new financial year on a positive note, adding 34 points to reach a high of 8576. However, it later slipped back due to low trading volumes as early interest faded, influenced by school holidays and end-of-financial-year reporting.
Adding to the subdued mood, trade uncertainty continues ahead of the 9 July United States (US) tariff expiry deadline. Additionally, the US will release a key labour market report, which is likely to strongly influence expectations for potential interest rate cuts by the Federal Reserve (Fed) in the coming months.
Overnight, AUD/USD reached a high of 0.6582, marking its highest level in eight months. These gains are expected to benefit stocks with significant exposure to costs in US dollars.
Travel stocks were boosted by a stronger AUD/USD..
Conversely, a stronger AUD/USD could negatively impact export-focused companies such as the big miners.
Dip buyers re-entered after last week’s weakness, lifting property stocks.
Local tech shares tracked the rally on Wall Street, where the US Tech 100 (Nasdaq 100) closed at a new record high.
Commonwealth Bank of Australia extended its decline to a fourth session, down 1.0% at $182.95, now more than 5% below last week's $192.00 record high.
Capital appeared to rotate into peers:
Elsewhere, Insignia Financial rallied 5.5% to $3.83 following confirmation that CC Capital Partners is still working on a 'binding bid'.
After the Australia 200 hit a new record high of 8639 earlier this month, we observed that the relative strength index (RSI) was at its most overbought level since December 2023, which was followed by a 4% pullback.
The 2.5% pullback since then, reaching last Monday’s 8421.1 low, helped the index work off overbought readings. The move was orderly, even reluctant, which suggests that the decline was a correction rather than the start of a downward trend.
In summary, provided the Australia 200 holds above support at 8420 – 8400 on a sustained basis, the view is that the correction from the 8639 high is complete at last Monday’s 8421.1 low. A retest and break of the 8639 high will likely follow.
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