Source : THE AGE NEWS
By Gemma Grant
The Australian sharemarket has pared back some early gains after higher-than-expected inflation numbers, but is still up for a fifth day as investors keep betting on another interest rate cut next month.
The S&P/ASX 200 was up 17 points, or 0.2 per cent, to 8087.60 at 1.13pm AEST, after the local market pushed past the 8000 mark on Tuesday. Seven of the 11 industry sectors were in the green, led by tech stocks, healthcare and property companies and the banks. The Australian dollar was stable, trading at US63.96¢.
Investors fear Trump’s tariffs could bring a recession if left unaltered because they could freeze global trade.Credit: Bloomberg
In the March quarter, prices rose by a higher-than-expected 0.9 per cent, with the annual rate steady at 2.4 per cent, the Australian Bureau of Statistics said. The figure is closely watched by the Reserve Bank for its interest rate decisions, with the hotter inflation potentially throwing a spanner into expectations of rate cuts in May.
However, the trimmed mean inflation rate of 2.9 per cent was its lowest level since late 2021, and fell by 0.4 percentage points over the past three months. The key measures of underlying inflation were 0.7 per cent, in line with the RBA’s forecasts, with the trimmed mean at 2.9 per cent and the weighted median at 3 per cent.
Deloitte Access Economics head Pradeep Philip said the figures showed a rate cut in May was still on the RBA’s agenda. He said with headline and underlying inflation back within the central bank’s target band, and with growing economic uncertainty overseas, it could safely cut rates.
A May rate cut “should be viewed as insurance against any collateral damage a trade war and geopolitical turbulence may cause the Australian economy,” he said.
Rate-sensitive tech stocks and real estate investment trusts were among the best performers around lunchtime.
Software maker WiseTech Global added 1.1 per cent and TechnologyOne gained 1 per cent, while data centre operator Goodman Group rose 0.7 per cent and Westfield shopping centre landlord, Scentre, gained 1 per cent. The consumer discretionary sector also advanced as conglomerate Wesfarmers rose 0.6 per cent and electronics retailer JB Hi-Fi added 1.3 per cent.
The big four banks were all trading higher, with Commonwealth Bank – the biggest stock on the ASX – gaining 1.3 per cent. Westpac was up 0.4 per cent, ANZ added 0.5 per cent, and NAB was up 0.2 per cent.
It was a different story for energy and mining stocks, which were among the biggest winners of the previous session. Iron ore heavyweight BHP shed 0.8 per cent, Fortescue lost 2.3 per cent and Rio Tinto dropped 0.2 per cent. Gold giant Newmont fell 1.6 per cent after gold prices declined overnight.
Energy and gas giants Woodside and Santos were down 0.4 per cent and 1.3 per cent, respectively, as oil prices tumbled again overnight amid concerns over the fallout from Donald Trump’s global trade war. West Texas Intermediate slipped 2.6 per cent to settle below $US60 a barrel, the lowest close in more than two weeks.
Star Entertainment shares were flat at 10c after the struggling casino operator reported a third-quarter operating loss of $21 million. The company has agreed to a $200 million investment from US firm Bally’s and a $100 million investment from its biggest shareholder Bruce Mathieson earlier this month.
In US markets, the latest tariff zigzag arrived for the car industry after Trump signed a pair of directives easing the impact of his tariffs on the automotive industry, yielding to weeks of intense lobbying from automakers, parts suppliers and dealers who warned excessive levies could push up car prices, triggering plant shutdowns and job losses.
Under the first executive order, signed aboard Air Force One, imported automobiles were given a reprieve from separate tariffs on aluminium and steel, an effort to prevent multiple levies from piling on top of each other.
The change is another indication that the levies placed on trading partners are creating a volatile economic climate for American companies. Even with the reduction, car prices are still expected to increase by thousands of dollars.
General Motors slipped 0.8 per cent despite reporting stronger-than-expected profits for the latest quarter. The company rescheduled a conference call with investors to discuss its results and forecasts for 2025 to Thursday due to “recent reports regarding updates to trade policy”.
On Wall Street overnight, shares rose again as other companies recorded better profits than forecast. However, chief executives said they were unsure how long it would last, given the uncertainty around Trump’s trade war. The S&P 500 was up 0.6 per cent, extending its winning streak to a sixth day. The Dow Jones Industrial Average was up 0.8 per cent and the Nasdaq composite was 0.6 per cent higher.
Industrial goods and machinery giant Honeywell International helped lead the market with a 4.9 per cent gain after reporting more substantial profits and revenue for the latest quarter than analysts had expected. Perhaps even more importantly for investors, it also raised its full-year profit forecast.
“Though we have not yet seen it in our results, we recognise we face an uncertain global demand environment for the remainder of 2025, and our company will work tirelessly, leveraging all tools available to us, to deliver for customers and shareholders,” chief executive Vimal Kapur said.
Other stocks weren’t as strong, even though their companies also reported stronger-than-expected profits.
Investors fear that Trump’s tariffs could trigger a recession if left unchanged, as they could freeze global trade and drive up prices for a wide range of products. Trump’s on-again-off-again rollout could also, by itself, throw into disarray the long-term plans for spending and investment by businesses and households.
“President Trump creates what I would call strategic uncertainty in the negotiations,” US Treasury Secretary Scott Bessent told reporters at the White House.
With Shane Wright, Millie Muroi and AP
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