Image Source : Krish Capital Pty Ltd

Index Update: The Australian equities rebounded strongly on Wednesday with the benchmark S&P/ASX 200 gaining around 0.7%, to 8,737.20 points, just 0.45% shy of its 52-week high. Over the past five trading days, the index surged 2.05% in total ascent. Sectoral strength was almost universal, with ten of 11 sectors advancing. Materials led the charge, jumping approximately 1.2% on the day and posting a five-day gain of 6.3%, firmly underpinning the market’s recovery.

Macro Update: U.S. President Donald Trump has finalised a substantial trade agreement with Japan that reduces existing tariffs on auto imports and averts the imposition of new duties on other Japanese goods. In return, Japan has committed to a USD 550 billion package of investment and loans directed toward the U.S. economy. The deal, considered the most consequential among several negotiated since Trump introduced global tariffs in April, will see tariffs on Japanese autos, representing over a quarter of Japan's U.S. exports, reduced from 25% to 15%. Additional duties scheduled to take effect on 01 August will also be trimmed by a similar margin. As part of the arrangement, Japan will boost imports of American agricultural products, including rice.

Top Market Movers: Top gainers on the ASX included Whitehaven Coal (ASX: WHC), which rose AUD 0.44 or 6.53% to AUD 7.18, followed by Elders (ASX: ELD), up 6.19%, and James Hardie Industries (ASX: JHX), gaining 5.13%. On the downside, Telix Pharmaceuticals (ASX: TLX) slumped 15.13% to AUD 21.32, leading losses, while Paladin Energy (ASX: PDN) and Clarity Pharmaceuticals (ASX: CU6) fell 11.26% and 6.68%, respectively.

Commodity Update: The dollar remained weak on Wednesday after President Trump announced a trade deal with Japan, reducing a planned tariff from 25% to 15% and securing a USD550 billion Japanese investment in the U.S. Gold slipped 0.24% to USD3,335.60. In comparison, silver rose 0.20% to USD39.63. Copper edged down 0.13% to USD9,902.60. Brent crude gained 0.31% to USD68.80, limited by fading optimism over the upcoming EU-China summit.

Our Stance: The ASX’s broad-based rebound, with the S&P/ASX 200 nearing its 52-week high, reflects improving sentiment after recent losses. Globally, markets were buoyed by President Trump’s landmark tariff deal with Japan, easing trade tensions and lifting auto-related equities. While commodities showed mixed signals, the rally can be viewed as sustainable in the near term, supported by macro stability, sector rotation, and renewed risk appetite amid global policy easing and investment flows into Australia.

In its latest trading session, the S&P/ASX 200 Index rose by 60.00 points to close at 8,737.20, 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 positive near-term outlook. A key level to watch is the resistance at 8,770.50. A decisive breakout above this threshold could mark a significant bullish development, potentially reshaping market sentiment and paving the way 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 will depend on the index’s ability to break and hold above the 8,770.50 resistance level.

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