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Index Update: Australian shares surged to a record high on Thursday, driven by higher gains in financials and industrials, as weaker-than-expected jobs data raised expectations of a near-term interest rate cut. The S&P/ASX 200 jumped 77.20 points, or 0.90%, to close at 8,639.00, marking a new 100-day high. The index is now just 0.03% shy of its 52-week peak and has added 0.58% over the past five sessions. Sector-wise, Industrials (+1.43%), Financials (+1.33%), and A-REITs (+1.31%) led the rally, while Information Technology (+1.02%) and Utilities (+0.99%) also posted notable gains.
Macro Update: Australia’s seasonally adjusted unemployment rate edged up to 4.3% in June, according to data released by the Australian Bureau of Statistics (ABS) on Wednesday. The economy added a net 2,000 jobs during the month, following a decline of 1,000 in May, with part-time roles increasing by 40,000 while full-time employment dropped by 38,000. Despite the slight monthly gain, total employment is up 2.0% from June 2024. Market focus now shifts to the Reserve Bank of Australia’s (RBA) August 12 policy meeting, with Reuters reporting that around 90% of traders expect a rate cut. The RBA held rates steady earlier this month, citing the need for more clarity on inflation trends before easing policy.
Top Market Movers: BLOCK, Inc. (ASX: XYZ) topped the gainers on Thursday with a 5.13% jump to AUD 106.40, followed by Nuix Limited (ASX: NXL), which rose 4.85% to AUD 2.38. Auckland International Airport (ASX: AIA) added 4.28% to close at AUD 7.07. On the losing side, Lifestyle Communities (ASX: LIC) slid 3.99%, West African Resources (ASX: WAF) dipped 3.90%, and Car Group (ASX: CAR) fell 2.91%.
Commodity Update: The dollar weakened on Thursday amid reports that U.S. President Trump might fire Fed Chair Jerome Powell, shaking market confidence. Although Trump denied the dismissal, he criticised Powell for not cutting rates. Gold slipped 0.42% to USD3344.90, while silver edged up 0.04% to USD38.13 and copper fell 0.01% to USD9634.15. Brent crude rose 0.39% to USD68.69, supported by strong economic data and easing trade tensions.
Our Stance: Thursday’s rally in Australian equities reflects growing investor optimism that a rate cut by the RBA is imminent, following softer-than-expected labour market data. The S&P/ASX 200’s climb to a fresh 100-day high underscores positive momentum, led by gains in interest rate-sensitive sectors like financials and A-REITs. However, the uptick in unemployment signals that underlying economic conditions remain fragile. While market sentiment is buoyant, a sustained uptrend will likely hinge on the RBA’s August 12 decision and global macro signals. Volatility in commodities and political noise in the U.S. could weigh on risk appetite in the near term.
In its latest trading session, the S&P/ASX 200 Index advanced 77.20 points, closing at 8,639.00. The session formed a bullish candlestick pattern on robust trading volumes, highlighting continued investor confidence and enthusiasm. Technically, the index remains firmly positioned above its 21-period Simple Moving Average (SMA), reinforcing a positive near-term outlook. A critical level to watch is the immediate resistance at 8,670.50 a decisive breakout above this threshold could signal a significant bullish development, potentially reshaping market sentiment and paving the way for further gains. From a broader perspective, the index’s sustained position above the 50-period SMA on the weekly chart further underpins its long-term bullish foundation. However, maintaining the current upward momentum will hinge on the index’s ability to break through and hold above the 8,670.50 resistance zone.
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