Australian shares edged higher on Monday, breaking a four-day losing streak as gains in gold and mining stocks offset broader market concerns. The S&P/ASX 200 index (XJO) rose 0.2% to 7,962.3, stabilizing near the six-month low it touched on Friday. However, the index remains nearly 7% below its record high from February 14.
Market Drivers: Gold and Mining Stocks Lead the Charge
The Australian stock market faced heavy losses last week amid global trade tensions. The latest market recovery was largely driven by strong commodity prices, which boosted mining and gold stocks.
- Mining stocks (XMM) climbed 0.9%, with BHP Group (BHP) up 0.6% and Rio Tinto (RIO) jumping 3.1%.
- Gold stocks (XGD) gained 1.4%, driven by rising bullion prices as investors sought safe-haven assets amid a weaker U.S. dollar.
- Energy stocks (XEJ) surged 1.5%, reflecting strength in the sector.
Financial Sector Under Pressure
Despite the slight market rebound, the financial sector slipped 0.1%, extending its losses from last week.
- Commonwealth Bank of Australia (CBA) fell 0.2%, while ANZ Group (ANZ) dropped 0.6%.
- Last week, financial stocks tumbled more than 4%, with analysts warning of further downside due to stretched valuations.
- “Big four banks may see additional pressure following Friday’s sell-off,” said Junvum Kim, senior sales trader at Saxo Markets.
China’s Economic Signals and Market Outlook
- Latest economic data from China showed continued deflationary pressures, raising concerns over demand for Australian exports.
- However, expectations for potential stimulus measures in China helped iron ore futures post modest gains.
- Market analysts suggest that if the ASX 200 declines further, it could find support at 7,800 before stabilizing, according to Henry Jennings, portfolio manager at Marcustoday Financial Newsletter.
New Zealand Market Gains as Fonterra Surges
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 index (NZ50G) rose 0.9% to 12,515.87.
- Fonterra (FCG) jumped 3.6% after the dairy giant forecast higher annual earnings, driven by strong volume and margin growth in its consumer division.
Investors continue to monitor global trade uncertainties, commodity prices, and China’s economic trajectory as key influences on market sentiment in the coming weeks.
