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Index Update: The Australian sharemarket ended positively on Monday, buoyed by renewed global trade optimism after the U.S. reached a trade agreement with the European Union. The S&P/ASX 200 rose 30.80 points, or 0.36%, to close at 8,697.70. While the index remains down 0.68% over the past five sessions and sits 0.90% below its 52-week high, improved investor sentiment saw eight of 11 sectors finish in the green. Telecommunications Services led the gains, climbing 1.06% and recovering from recent losses, though it remains down 0.52% over five days.
Macro Update: The U.S. and European Union have reached a landmark framework trade deal, easing months of transatlantic tension and uncertainty. Key aspects include a 15% baseline tariff on most EU goods entering the U.S., including cars and semiconductors, although final rates for chips and pharmaceuticals will be decided separately. Both sides agreed to zero tariffs on aircraft, selected chemicals, generic drugs, and critical raw materials. Steel and aluminium tariffs remain at 50% for now but are expected to shift to a quota system. The EU also committed to USD 750 billion in strategic purchases and USD 600 billion in U.S.-bound investment during Trump’s second term.
Top Market Movers: The ASX session saw Magellan Financial Group (ASX:MFG) lead the gainers, rising 4.60% to AUD 10.91, followed by Newmont Corporation (ASX:NEM) up 4.49% to AUD 99.66, and Generation Development Group (ASX:GDG) gaining 4.46% to AUD 5.85. On the downside, Boss Energy (ASX:BOE) plunged 43.97% to AUD 1.91, while Pilbara Minerals (ASX:PLS) fell 11.69% to AUD 1.70, and Deep Yellow (ASX:DYL) dropped 8.36% to AUD 1.65.
Commodity Update: The euro strengthened on Monday following a trade agreement between the U.S. and the EU, reducing tariffs to 15% from a threatened 30%. The deal, announced by President Trump and European Commission President Ursula von der Leyen in Scotland, aims to prevent a global trade war. Gold rose 0.03% to USD3,393.55, silver surged 0.20% to USD38.44, copper gained 0.28% to USD9,814.50, and Brent crude increased 0.32% to USD68.66.
Our Stance: The Australian sharemarket’s rebound reflects a broader shift in investor sentiment sparked by the landmark U.S.–EU trade deal, which eases tariff pressures and brings stability to global supply chains. While the S&P/ASX 200 remains marginally below its recent peak, the broad-based sectoral gains—particularly in telecommunications—signal cautious optimism. Key commodity upticks further support this trend. However, volatility among key stocks like Boss Energy underscores lingering fragility.
In its latest trading session, the S&P/ASX 200 Index rose 30.80 points to close at 8,697.70, supported by a bullish candlestick pattern and strong trading volumes signals that reflect continued investor confidence and enthusiasm. Technically, the index remains firmly above its 21-period Simple Moving Average (SMA), reinforcing a near-term positive outlook. A key level to watch is the resistance at 8,730.40. A decisive breakout above this threshold could mark a significant bullish development, potentially reshaping market sentiment and opening the door for further gains. From a broader perspective, the index’s position above the 50-period SMA on the weekly chart further solidifies its long-term bullish foundation. However, sustaining the current upward momentum hinges on the index’s ability to surpass and hold above the 8,730.40 resistance level.
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