HomeReportsWhat Matters Today: As stocks soar, is it time to throw…
The ASX 200 endured another volatile and ultimately brutal session on Wednesday, ending down 1.8%, as Trump’s tariffs came into force. Trump’s latest tariffs pushed levies imposed on China this year to as high as 104%, along with import taxes on roughly 60 trading partners that ran trade surpluses with the US.
The ASX 200 fell a further 0.6% on Tuesday, marking its longest losing streak in four years. It was another ugly day for Australia's share market, notching its sixth-straight session of losses as 9 out of the 11 main sectors retreated. On the day, it was the miners that did the most damage, contributing over 35% of the day's decline as a bounce in the $US dollar dragged down commodities, except the oil price, which continues to push higher, notching its seventh daily advance, almost a perfect mirror image of the ASX.
The ASX had another tough session today with selling fairly broad-based, leaving the market testing its 200-day moving average as investors remain cautious around the macro backdrop.
The heavyweight US indices powered to fresh all-time highs on Friday night. However, the weekend delivered another twist to the Iran saga with US President Trump abruptly cancelling the planned envoy trip to Pakistan for peace talks, citing unnecessary costs and a disappointing offer from Tehran.
The ASX200 ended the penultimate week of April, surrendering -1.8% of the month's gain, with a string of profit downgrades combining with the country’s high vulnerability to the global fuel crisis caused by the Iran war - the oil price continues to grind higher with no clear resolution in sight for the conflict. A wave of profit downgrades swept the ASX, led this week by Cochlear’s earnings shock, which sent its shares plunging 40%. Other companies warning that surging energy costs will weigh on earnings included Qantas, Worley, a2 Milk, Orora, Cleanaway and Qube. The ASX is also struggling because its two heavyweight sectors have come off the boil, the banks and resources.
A choppy session that mirrored yesterday’s move to end the week as higher oil prices kept a lid on the local market for most of the day until a decent ~50pt rally from the lows saw the index finish almost flat into the close. The selling in financials eased, providing some stability, while materials weighed as gold stocks took a hit.
The ASX remained under pressure today, as the index notched its third consecutive day of losses, weighed down by renewed fears around the Iran conflict after reports of Iranian gunboats firing on commercial vessels and seizing ships in the Strait of Hormuz.
The ASX200 fell sharply on Wednesday, dragged lower by healthcare and banking stocks, while miners offered little support to offset the weakness. The bears dominated the company news, with Cochlear (ASX:COH) -41%, Generation Development (ASX:GDG) -23%, and Bank of Queensland (ASX:BOQ) -9.1% pushing a bounce by Treasury Wine (ASX:TWE) +17% into the shade. The ongoing weakness in the banking sector, combined with heavy selling in healthcare stocks, accounted for more than 95% of the day's decline, underscoring the market's concentration of weakness. Similarly, the trifecta of Commonwealth Bank (ASX:CBA), Cochlear (ASX:COH) and CSL Ltd (ASX:CSL) made up 50% of the day's decline on their own.
The ASX endured a tough session with heavy selling in Financials and Healthcare on a read-through from Bank of Queensland’s shrinking net interest margins and a brutal downgrade from Cochlear. The weakness came despite relatively stable overseas leads after US President Donald Trump announced a ceasefire extension – pushing US Futures higher during our time zone. However, with no deadline in play, the question becomes how long negotiations will be drawn out for, with higher oil prices incrementally adding to inflationary pressures each day that passes.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
Verication email sent.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
!
Invalid One Time Password
Please check you entered the correct info, please also note there is a 10minute time limit on the One Time Passcode
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
Market Matters members receive daily market reports, real-time trade alerts, full access to 5 portfolios and dynamic company data.
Choose how you'd like to proceed:
We have a range of membership options to suit your needs and budget, why not join today and get unlimited access to the premium Market Matters service.
