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Index Update: The S&P/ASX 200 closed lower on Monday, falling 20.60 points or 0.24% to 8,414.10. The Australian sharemarket dipped as concerns over US President Donald Trump’s ongoing global trade war dampened investor appetite for risk assets. Despite the drop, the index has gained 0.64% over the past five days and remains 2.33% below its 52-week high. Sector performance was mixed, with eight of the eleven sectors declining. Telecommunications Services led gains, rising 0.39% on the day and 0.33% over the past five days.
Macro Update: President Donald Trump announced on Friday that the United States will double its tariffs on steel and aluminum imports from 25% to 50%, effective Wednesday. Speaking at a rally in Pittsburgh, Pennsylvania, Trump emphasised that the increased tariffs aim to strengthen the domestic steel industry and reduce dependence on China. In response, the European Union has warned it is prepared to take action against Trump’s decision, criticising the tariff hike for undermining ongoing trade negotiations.
Top Market Movers: The top gainers on the ASX included Brickworks Limited (ASX:BKW), soaring 27.59% to AUD 35.10, Washington H Soul Pattinson & Company Limited (ASX:SOL) rising 16.44% to AUD 43.00, and Generation Development Group Limited (ASX:GDG), up 4.51% to AUD 5.79. On the downside, Clarity Pharmaceuticals Ltd (ASX:CU6) dropped 12.27% to AUD 1.90, Mineral Resources Limited (ASX:MIN) fell 11.76% to AUD 19.58, and Liontown Resources Limited (ASX:LTR) declined 8.27% to AUD 0.56.
Commodity Update: The U.S. dollar slipped Monday, retreating from last week’s gains as markets reacted to President Trump’s plan to double tariffs on steel and aluminum to 50%, raising growth and inflation concerns. Gold rose 0.45% to USD 3,330.20, silver gained 0.39% to USD 33.16, and copper climbed 0.59% to USD 9,572.20. Brent crude jumped 2.30% to USD 64.23 amid escalating Russia-Ukraine tensions and looming U.S. sanctions on Moscow.
Our Stance: The recent drop in the S&P/ASX 200 reflects growing investor caution amid escalating trade tensions sparked by President Trump’s decision to double steel and aluminum tariffs. While aimed at protecting domestic industries, these aggressive measures risk disrupting global supply chains and provoking retaliatory actions, as seen with the EU’s strong response. This uncertainty could weigh further on market confidence, highlighting the balance between national and internation economic cooperation.
The S&P/ASX 200 closed 20.60 points lower, reflecting a challenging session marked by the formation of a small bearish candlestick pattern on the daily chart. This occurred amid elevated trading volume, signalling caution or indecision among market participants. Despite the modest pullback, the index continues to trade above its 50-period Simple Moving Average (SMA) on the daily chart, which now acts as a key support level critical for preserving the current uptrend. A notable support area lies at 8,300, and holding above this zone would help reinforce recent gains and maintain bullish sentiment. On the weekly chart, the index is also trading above the 21-period SMA, providing an additional layer of long-term technical strength. This alignment—above the 50-SMA on the daily and 21-SMA on the weekly suggests a continued potential for upward momentum, supported by both short- and medium-term trend structures.