Image Source : Krish Capital Pty Ltd

Index Update: The Australian sharemarket hit a fresh milestone on Wednesday, closing above 8,800 points as weaker U.S. economic data heightened expectations of interest rate cuts. The S&P/ASX 200 rose 73.30 points, or 0.84%, to 8,843.70, marking a new 100-day high. The index has advanced 1.00% over the past five sessions and now sits just 0.06% below its 52-week peak. Market gains were broad-based, with ten of 11 sectors finishing higher. Energy led the advance, rising 1.30% for the day and 0.92% over the week.

Macro Update: All Australian household types experienced an increase in living costs during the June 2025 quarter, rising between 0.4% and 1.0%, according to the Australian Bureau of Statistics (ABS). Employee households recorded the smallest quarterly increase, a trend last seen in March 2022 before mortgage interest rates began to climb. In contrast, households primarily reliant on government payments faced the largest rise in living costs during the period.

The U.S. employment report, released Friday, underscored its pivotal role in signaling economic trends, as July nonfarm payrolls rose by just 73,000, well below the 106,000 expected. The bigger surprise came from steep downward revisions, with May’s job gains cut to 19,000 from 144,000 and June slashed to 14,000 from 147,000. These adjustments dragged the three-month average to just 35,000, less than a third of last year’s pace.

Top Market Movers: IDP Education Limited (ASX: IEL) led the top gainers on Wednesday, rising AUD 0.460 to AUD 4.390, up 11.70%. Pinnacle Investment Management Group Limited (ASX: PNI) followed with a 9.47% jump to AUD 25.210, while REA Group Ltd (ASX: REA) advanced 6.94% to AUD 254.500. On the downside, TPG Telecom Limited (ASX: TPG) fell 5.09% to AUD 5.220, Light & Wonder Inc. (ASX: LNW) slipped 4.10% to AUD 136.480, and Aurizon Holdings Limited (ASX: AZJ) declined 3.69% to AUD 3.130.

Commodity Update: The dollar remained rangebound on Wednesday as investors awaited U.S. President Donald Trump's nominee for the Federal Reserve Board. Gold dipped 0.09% to USD 3,431.60, while silver inched up 0.02% to USD 37.83. Copper rose 0.17% to USD 9,660.80. Brent crude rebounded 0.40% to USD 66.93 from a five-week low, supported by concerns over supply disruptions following Trump’s tariff threats on India for its Russian oil imports.

Our Stance: The Australian sharemarket reached a new high at 8,843.70 on Wednesday, buoyed by weaker U.S. data fueling rate-cut hopes. Gains were broad-based, with resources stocks rising for the third straight day as global growth concerns drove sector rotation. However, the macro backdrop reflects mixed signals. Rising living costs, particularly for government-dependent households, and a sharply weaker U.S. jobs report with heavy downward revisions highlight ongoing economic fragility. Market optimism appears driven more by expectations of policy support than by strong fundamentals. In such a scenario, while near-term momentum may persist, volatility risk remains elevated if global growth weakens faster than rate cuts can cushion.

In its latest trading session, the S&P/ASX 200 Index advanced 73.30 points to close at 8,843.70, underpinned by a bullish candlestick formation and elevated trading volumes, both indicative of sustained investor optimism. Technically, the index remains well-supported above its 21-period Simple Moving Average (SMA), reinforcing a constructive short-term outlook. A key level to monitor is support at 8,670.50; maintaining this level is crucial for preserving the current bullish structure. On the upside, a decisive breakout beyond recent highs could act as a catalyst for renewed momentum. From a broader standpoint, the index's position above the 21-period SMA on the weekly chart further affirms its strong long-term bullish trend.

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