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Index Update: The S&P/ASX 200 edged up 1.40 points on Tuesday to close at 8,590.70, showing resilience despite the RBA’s decision to hold rates steady. The index has risen 0.58% over the past five days and sits just 0.56% below its 52-week high. Sector performance was mixed, with four sectors advancing and seven declining. Telecommunications Services led gains, rising 0.48% on the day and up 0.32% across the past week.
Macro Update: The Reserve Bank of Australia held the cash rate steady at 3.85% today, opting for caution amid moderating inflation and global uncertainties. Inflation has eased significantly from 2022 peaks, with trimmed mean inflation at 2.9% in March, yet recent CPI data came in slightly higher than anticipated. While domestic demand is gradually improving and labour markets remain tight, risks persist from global trade tensions and weak productivity growth. The Board voted 6-3 to pause, awaiting further data to confirm inflation’s sustainable return to the 2.5% target, while reaffirming its commitment to price stability and full employment.
Top Market Movers: Vault Minerals Limited (ASX: VAU) led gains on the ASX, rising 7.79% to close at AUD 0.415. West African Resources Limited (ASX: WAF) climbed 5.24% to AUD 2.410, while Westgold Resources Limited (ASX: WGX) advanced 4.38% to AUD 2.860. Among the top losers, HMC Capital Limited (ASX: HMC) dropped 5.35% to AUD 3.890, Nuix Limited (ASX: NXL) fell 4.67% to AUD 2.040, and Clarity Pharmaceuticals Ltd (ASX: CU6) slid 4.00% to AUD 2.640.
Commodity Update: The dollar strengthened on Tuesday after President Trump announced new tariffs, effective August 1, on nations including Japan and South Korea. Gold rose 0.14% to USD3,347.40, silver gained 0.38% to USD37.04, and copper edged up 0.13% to USD9,830.45. However, Brent crude slipped 0.29% to USD69.37 as investors weighed the impact of the tariffs alongside a larger-than-expected OPEC+ output increase for August.
Our Stance: The ASX 200’s modest rise despite the RBA’s rate hold underscores the market’s resilience amid cautious economic signals. While inflation is easing, sticky CPI readings and global uncertainties keep the central bank cautious, one should expect short-term volatility as data guides future rate cuts. Higher gains in miners like Vault Minerals and West African Resources hint at sector rotation into commodities, especially with geopolitical tensions lifting gold and copper. Overall, one should remain cautiously optimistic and stay diversified given the uncertain economic backdrop.
In its latest session, the S&P/ASX 200 Index edged up 1.40 points to close at 8,590.70. The index continues to trade above its 50-period Simple Moving Average (SMA) on the daily chart a key dynamic support level that traders closely watch. Notably, immediate support is identified near 8,480.50, a level that remains critical for sustaining recent gains and maintaining confidence in the index’s upward trajectory. In addition, the index’s position above the 21-period SMA on the weekly chart signals the potential for sustained bullish momentum. The alignment of these technical indicators across both daily and weekly timeframes highlights the index’s resilience and supports a broadly constructive outlook despite short-term market fluctuations.
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