ASX 200 hits 50-day high on U.S.-China trade talk optimism

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/ASX 200 closed higher on Tuesday, rising 52.60 points or 0.63% to reach 8,466.70, marking a new 50-day high. The Australian sharemarket posted its best session in a month, buoyed by a Wall Street rebound following reports that Beijing and Washington may resume trade talks soon. Over the past five days, the index has climbed 0.70% and currently sits 1.72% below its 52-week peak. Nine out of eleven sectors finished in positive territory, with the financial sector leading the gains, up 1.24% on the day and 1.81% over the past week.

Macro Update: Australia’s current account deficit narrowed by AUD 1.7 billion to AUD 14.7 billion in the March quarter of 2025 (seasonally adjusted, current prices), according to data released today by the Australian Bureau of Statistics (ABS). The improvement was driven primarily by an AUD 1.9 billion reduction in the net income deficit, though partially offset by a AUD 0.2 billion decline in the goods and services surplus. Imports of goods and services rose by 2.2 per cent, while exports increased by 1.9 per cent over the quarter. Goods exports rose 2.9 per cent, marking a second consecutive quarterly increase, the first such streak since the June quarter of 2022. The growth was led by higher exports of non-monetary gold, supported by increased volumes and sustained high prices.

Top Market Movers: The top gainers on the ASX included Tabcorp Holdings (ASX: TAH), which rose 5.80% to AUD 0.73, followed closely by Judo Capital Holdings (ASX: JDO) up 5.78% to AUD 1.47, and Clarity Pharmaceuticals (ASX: CU6) gaining 5.54% to AUD 2.00. On the downside, IDP Education (ASX: IEL) plunged 48.06% to AUD 3.88, while Mineral Resources (ASX: MIN) fell 5.52% to AUD 18.50, and Elders Limited (ASX: ELD) dropped 4.35% to AUD 5.94.

Commodity Update: The dollar dropped to a six-week low Tuesday amid concerns over U.S. economic weakness tied to the ongoing trade war. Steel and aluminum tariffs will double to 50% on Wednesday, the same day trade deal offers are due. Gold slipped 0.16% to USD 3,391.90, silver fell 1.30% to USD 34.24, and copper dipped 0.20% to USD 9,576.15. Brent crude rose 0.85% to USD 65.18 on supply fears linked to Iran and Canadian wildfires.

Our Stance: The S&P/ASX 200’s positive performance, driven by optimism over renewed US-China trade talks, reflects cautious investor confidence despite global uncertainties. Australia’s narrowing current account deficit and steady export growth add further positive momentum, signaling resilience in the economy. However, market volatility remains evident, with sharp declines in some stocks and ongoing pressure from commodity price fluctuations and trade tensions. Overall, a cautiously optimistic outlook is warranted as global risks persist.

In the latest session, the S&P/ASX 200 Index gained 52.60 points, closing at 8,466.70, reflecting continued investor confidence and bullish sentiment. The advance was marked by a bullish candlestick formation accompanied by strong trading volumes, reinforcing the market’s upward bias. Technically, the index remains above the 21-period Simple Moving Average (SMA) on both the daily and weekly charts, highlighting a solid short-term trend and a supportive longer-term outlook. A key resistance level to monitor is at 8,520.20. A decisive breakout above this zone could confirm a bullish continuation pattern, potentially paving the way for further gains. Sustained momentum above this level would likely strengthen investor sentiment and reinforce the market's positive trajectory in the near term.