Market update: 1 April 2025
The ASX 200 defied the global downtrend last week, ending up 0.6%, one of the few major indices to close in the green. Investors took comfort in the 2025–26 Federal Budget, which was focused on cost-of-living relief ahead of the upcoming election. Measures included tax cuts, cheaper PBS medicines, and A$150 electricity rebates. Adding to the positive sentiment was a softer-than-expected inflation read, with February monthly CPI rising just 2.4% YoY—below consensus expectations. Financials and Energy led the local rally, up 2.5% and 2.0% respectively, with six of the eleven sectors finishing higher.
Globally, however, markets remained under pressure. US indices fell again, with the Dow, S&P 500, and Nasdaq down 1.0%, 1.5%, and 2.6% respectively, as President Trump’s 25% tariff on non-US-made auto imports took centre stage. The move rattled confidence, with consumers and businesses growing increasingly cautious. Consumer sentiment hit a four-year low, while S&P 500 companies hoarded cash at near-record levels amid heightened economic and geopolitical uncertainty. In Europe, major indices closed lower following the tariff news, with the Euro Stoxx 50 down 1.7%. Hopes of exemptions were dashed, and retaliatory threats from the EU raised concerns of an escalating trade spat.
Meanwhile, Greater China remains a relative bright spot. Despite a modest pullback—with the Shanghai Composite down 0.4% and the Hang Seng down 1.1%—many investors remain optimistic. Beijing is stepping up efforts to support consumption and encourage tech and AI investment, with several major banks raising their year-end targets for Chinese indices by as much as 8–9%. In Japan, the Nikkei fell 1.5%, led lower by auto stocks reacting to the US tariff move, and by weaker-than-expected private sector activity data. With volatility likely to persist, all eyes will remain on trade developments and their knock-on effects across global markets.
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