The Australian sharemarket snapped a two-day losing streak on Monday after Washington struck a trade deal with the European Union and looked set to extend its tariff truce with China, boosting investor sentiment.
The S&P/ASX 200 Index added 30.8 points, or 0.4 per cent, to 8697.7, with eight of the 11 sectors finishing higher. The All Ordinaries finished up 0.3 per cent.
S&P 500 futures were also trading higher, pointing to further gains on Wall Street, after the US and EU agreed to a deal that will impose 15 per cent tariffs on most European exports, including cars.
Beware volatility
As President Donald Trump’s August 1 tariff deadline looms, Bloomberg reported Washington and Beijing were expected to extend their tariff ceasefire by another three months. That helped push the Australian dollar to a nine-month high, which was buying nearly US66¢ at the close.
UBS Global Wealth Management chief investment officer Mark Haefele said in a note that the US-EU tariff truce eased trade tensions but warned that markets remained fragile.
“The agreement helps de-escalate global trade tensions and supports the view that the worst may be behind us. But we think markets may already have priced in much of the good news,” he said.
“After a strong rally and with good news now well-priced, we believe that markets may be vulnerable to volatility in the near-term.”
On the ASX, financials outperformed as investors piled back into Commonwealth Bank, sending the shares up 1.2 per cent to $174.90. National Australia Bank, Westpac and ANZ had a more lacklustre session, each climbing less than 1 per cent.
Those gains were offset by weakness in the resource companies. Coal stocks weighed on the energy sector with Whitehaven Coal falling 4.2 per cent to $6.66, and Yancoal 2.6 per cent to $6.33. It follows a court decision last week to overturn the 2022 approval of a Hunter Valley coal project.
And Boss Energy plunged 44 per cent to $1.91 after it flagged potential challenges in hitting nameplate capacity at its Honeymoon uranium project.
The iron ore miners were also weaker with Singapore iron ore futures off 1.8 per cent at $US101.40 a tonne. Rio Tinto dropped 1.6 per cent to $116.95, Fortescue Metals lost 1.1 per cent, and BHP slid 1.2 per cent to $40.33.
Lithium producers were also sold off as lithium carbonate futures in China tumbled 8 per cent to 73,120 yuan per tonne on Monday. After a recent strong rally, Pilbara Minerals dived 11.7 per cent to $1.70 and Liontown Resources 8 per cent to 86¢.
Stocks in focus
In corporate news, Helloworld Travel was among the ASX’s best performers, jumping 14.1 per cent at $1.70, after it upgraded its full-year earnings guidance to between $58 million and $62 million despite softer booking volumes. The company flagged stronger margins, a rise in cruise demand and a gain on its Webjet stake.
Stealth Group rose 11 per cent to 70.5¢ after telling investors that it had seen a significant uplift in pre-order sales for mobile accessories aligned to Apple’s iPhone 17 launch, securing about $6 million in pre-sales, up 50 per cent on the period before.
And Bubs Australia gained 2.9 per cent to 18¢ after appointing former Fonterra executive Joe Coote as its new CEO as it looks to become a permanent brand in the US, the world’s second-largest formula market.
