Supported by gains in the real estate and mining sectors, the Australia 200 climbed steadily today. Investors shrugged off tariff headlines as markets digested fresh data from the US Federal Reserve and China’s inflation report.
Written by
Market Analyst
The Australia 200 trades 56 points (0.67%) higher at 8595 as of 2.15pm AEST.
The Australia 200 (ASX 200) has rebounded back to 8600 today following gains on Wall Street, as traders in the United States (US) brushed aside another round of tariff headlines while digesting the meeting minutes of the Federal Open Market Committee (FOMC).
The minutes reaffirmed FOMC members' belief that interest rates are 'well positioned to wait for more clarity'. Upcoming inflation data in the US, similar to the situation in Australia, will be pivotal in assessing the impact of tariffs and whether the Federal Reserve (Fed) will cut rates by the end of the year.
In tariff news, President Donald Trump expanded the list of countries facing new US tariffs starting 1 August, including the Philippines, Iraq, and potentially Brazil. Brazil has said it will meet Trump's 50% tariffs with 'reciprocity', a response that saw US equity futures dip 0.25% in trading today.
Iron ore futures rose 2% during Asian trading to $98.10 per tonne, following stronger-than-expected consumer inflation in China at 0.1% year-on-year (YoY) vs 0.0% expected. The end of a four-month deflationary streak lifted hopes that Chinese stimulus and improving trade conditions may support demand for Australia’s exports.
Dip buyers stepped in after the financials sector declined 3.5% from its 9676 record high to Monday’s low of 9349.
Healthcare stocks extended their losses for a third straight day after Trump proposed a 200% tariff on pharmaceutical imports following a grace period.
The real estate sector recovered after three consecutive sessions of losses earlier this week.
The 2.5% pullback from the 8639 record high into the recent 8421.1 low helped the index work off overbought readings and was orderly, indicating the move lower was likely part of a correction rather than the start of an impulsive move lower.
In summary, providing the Australia 200 holds above support at 8420 - 8400 (sustained basis as always), the view is the correction from the 8639 high is complete at the 8421.1 low and that a retest and break of the 8639 high will likely be forthcoming before a push to 8800.
A sustained break of support at 8420 - 8400 would indicate a pullback towards the 200-day moving average at approximately 8250 is underway.
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