Image Source : Krish Capital Pty Ltd

Index Update: The S&P/ASX 200 closed higher on Wednesday, rising 56.60 points or 0.66% to a record closing high of 8,597.70. The Australian sharemarket was buoyed by weaker-than-expected retail data, which strengthened expectations of a potential interest rate cut by the Reserve Bank next week. Over the past five days, the index has gained 0.45% and now sits just 0.48% below its 52-week high. Ten of the eleven sectors finished in positive territory, with A-REITs leading the gains, up 1.85% for the day and 0.51% over the past week.

Macro Update: Australian retail turnover rose by 0.2 per cent in May 2025, according to seasonally adjusted figures released by the Australian Bureau of Statistics (ABS). This follows a flat result in April and a similar 0.2 per cent increase in March. The modest rise in May was primarily driven by a rebound in clothing purchases, which helped lift overall spending. However, the broader retail environment remained subdued, with declines in food-related spending and little to no change in household goods sales, highlighting ongoing consumer caution.

Top Market Movers: Perpetual Limited (ASX: PPT) led the gains on Wednesday, jumping 8.75% to AUD 20.14. Magellan Financial Group (ASX: MFG) rose 5.96% to AUD 9.24, while AMP Limited (ASX: AMP) climbed 5.51% to AUD 1.34. On the losing end, Helia Group (ASX: HLI) plunged 21.35% to AUD 4.31, Domino’s Pizza (ASX: DMP) fell 15.79%, and Mesoblast (ASX: MSB) dropped 8.97%.

Commodity Update: On Wednesday, the U.S. dollar hovered near its lowest level since February 2022, weighed down by dovish signals from Federal Reserve Chair Jerome Powell and concerns about former President Donald Trump’s spending bill. Gold fell 0.15% to USD 3,344.70, silver edged down 0.06% to USD 36.02, copper rose 0.30% to USD 9,963.35, and Brent crude increased 0.08% to USD 67.18 ahead of a key producers' meeting on August output.

Our Stance: The S&P/ASX 200 closed at a record high of 8,597.70 on Wednesday, lifted by rising expectations of an interest rate cut following softer-than-expected retail data. While May retail turnover edged up just 0.2%, driven by clothing sales, weakness in food and household goods highlights ongoing consumer restraint. Meanwhile, commodity markets showed mixed trends, with a weaker U.S. dollar adding complexity. In essence, markets are optimistic, but underlying economic softness suggests cautious optimism.

In its latest session, the S&P/ASX 200 Index advanced 56.60 points, closing at 8,597.70, as buying interest continued to support the broader market. From a technical standpoint, the index remains firmly positioned above its 50-period Simple Moving Average (SMA), which underscores the prevailing bullish sentiment and signals that the underlying trend remains intact. The SMA, which previously acted as a dynamic resistance during past pullbacks, has now transitioned into a key support level. This shift highlights the market’s ability to hold onto recent gains and suggests that dips may continue to attract buying interest. A crucial support level at 8,470.60 is in focus, aligning with a key horizontal price zone. 

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