Australian Sharemarket Edges Higher, Energy Stocks Lead Rally

Image Source : Krish Capital Pty Ltd

Index Update: The Australian sharemarket edged up on Thursday, propelled by a rally in energy stocks. The S&P/ASX 200 closed 12.90 points higher, or 0.15%, at 8,409.80, reaching a new 50-day high. Over the past five days, the index has gained 0.73% and currently sits 2.38% below its 52-week peak. Seven of the 11 sectors finished in positive territory, with energy leading the charge, climbing 1.33% for the day and 5.13% over the past week.

Macro Update: Private new capital expenditure (capex) declined by 0.1 per cent in the March quarter of 2025 and was 0.5 per cent lower compared to the prior corresponding period, according to seasonally adjusted, chain volume measures released today by the Australian Bureau of Statistics (ABS). The overall decline in investment was driven by a 0.9 per cent fall in non-mining industries, while investment in the mining sector rose by 1.9 per cent. The ABS also released updated forecasts for business investment over the coming financial years. Businesses have revised up their expected capex for 2024–25 by 2.2 per cent (in current prices), while expectations for 2025–26 have increased by 5.6 per cent compared to the previous estimates made three months ago.

Top Market Movers: On Thursday, Capstone Copper Corp. (ASX: CSC) led the gainers, rising 4.70% to AUD 8.69, followed by Zip Co Limited (ASX: ZIP), which increased 3.34% to AUD 2.01, and Liontown Resources Limited (ASX: LTR) gained 3.31% to AUD 0.625. On the decline, Paladin Energy Ltd (ASX: PDN) fell 4.95% to AUD 6.14, Smartgroup Corporation Ltd (ASX: SIQ) dropped 4.58% to AUD 7.29, and Boss Energy Ltd (ASX: BOE) decreased 3.63% to AUD 3.98.

Commodity Update: A U.S. federal court blocked President Trump’s proposed "Liberation Day" tariffs, ruling he exceeded his authority. The decision boosted the dollar against haven currencies. Gold dropped 0.94% to USD 3,291.30, while silver rose 0.25% to USD 33.34. Copper gained 0.40% to USD 9,604.95. Brent crude climbed 1.00% to USD 65.55, lifted by improved market sentiment following the court’s rejection of the broad import duties plan.

Our Stance: The Australian share market’s modest gains, led by energy stocks, reflect cautious optimism amid mixed signals. While a slight dip in private capital expenditure signals ongoing investment challenges outside mining, upgraded business capex forecasts suggest improving confidence ahead. The US court ruling against Trump’s tariffs has eased trade fears, supporting commodity prices and market sentiment. However, uneven sector performance and global uncertainties mean investors should remain vigilant, balancing optimism with caution in the weeks ahead.

In its latest session, the S&P/ASX 200 Index rose 12.90 points to close at 8,409.80, supported by a bullish candlestick formation and strong trading volumes both indicators of ongoing investor optimism and confidence. From a technical perspective, the index remains comfortably above its 21-period Simple Moving Average (SMA), reinforcing a positive near-term outlook. A key level to watch is resistance at 8,450.30. A clear breakout above this point could signal a notable bullish shift, potentially improving market sentiment and paving the way for additional gains. Looking at the broader trend, the index’s position above the 50-period SMA on the weekly chart underlines its long-term bullish trajectory. However, sustaining this upward momentum hinges on the index's ability to break through and hold above the 8,450.30 resistance level a move that could act as a trigger for renewed upward acceleration.