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Highlights:
- S&P 500 Extends Gains: First two-day rise since its all-time high on February 19, signaling early stabilization in equities.
- Chinese Economic Data Fuels Commodities: Strong retail sales, fixed asset investment, and industrial production lift mining and resource stocks.
- Corporate Developments: New Hope Corporation (ASX:NHC) posts robust 1H25 results, while Hanwha acquires a 9.9% stake in Austal Limited (ASX:ASB).
The ASX 200 futures indicated a strong open, climbing 60 points (+0.76%) as of 8:30 am AEDT, following gains on Wall Street. The S&P 500 registered its first back-to-back positive sessions since February 19, showing early signs of market stabilization. Strength in commodity prices, driven by better-than-expected economic data from China, contributed to a broad rally in mining stocks.
Global equities experienced an upward shift, although major US indices finished off their session highs. The S&P 500’s recent rebound has been attributed to oversold conditions rather than fundamental shifts in market dynamics. Historical data suggests that similar 10% pullbacks—without entering a bear market—have taken an average of eight months to recover. Meanwhile, valuations for the Magnificent 7 stocks have eased but remain elevated, trading at 26 times earnings compared to historical lows of 19 times in 2018 and 2022.
Commodities and resource stocks benefited from China’s latest economic indicators, which exceeded expectations across key sectors. Retail sales rose 4.0% year-on-year, industrial production increased 5.9% against estimates of 5.3%, and fixed asset investment grew 4.1% versus the expected 3.6%. Despite the continued decline in housing prices, the pace of contraction eased, with the index showing a -4.8% year-on-year change compared to the previous -5.0%. The stronger economic backdrop fueled optimism for continued demand in raw materials.
The energy sector saw mixed movements as investors weighed policy shifts. Money managers increased bearish bets on gasoline and diesel amid uncertainty around global trade policies. Additionally, Goldman Sachs adjusted its oil price forecasts for 2025 and 2026, citing expectations for slower GDP growth and higher OPEC supply. In corporate developments, Oracle Corporation (NYSE:ORCL) remained in focus as discussions with the White House over its potential role in the TikTok deal progressed. Meanwhile, Berkshire Hathaway (NYSE:BRK.A) increased its stakes in Japan’s trading houses, reflecting its continued interest in the region.
In central bank updates, US Federal Reserve Chair Jerome Powell faces a delicate balancing act, aiming to reassure investors about economic stability while maintaining a stance of readiness for policy adjustments. The Bank of England is expected to hold rates steady, while the Swiss National Bank faces an uncertain rate decision.
Political developments also shaped market sentiment. The US government averted a shutdown as new funding measures were signed into law. Trade tensions resurfaced, with fresh reciprocal tariffs set to take effect in April, raising concerns over potential economic fallout. The trade dispute between the US and Europe could impact $9.5 trillion in global commerce, with industries beyond luxury goods and alcoholic beverages likely to be affected.
The ASX session featured notable corporate updates. New Hope Corporation (ASX:NHC) reported a 35% increase in 1H25 net profit after tax to $340.3 million, alongside a fully franked interim dividend of 19 cents per share and a share buyback plan of up to $100 million. Austal Limited (ASX:ASB) gained attention following Hanwha’s move to acquire a 9.9% stake at a 16% premium to the last closing price, with no immediate plans for control acquisition. Additionally, Findi Ltd (ASX:FND) announced National Payments Corporation of India’s approval for increased ATM interchange fees, expecting NPAT impacts exceeding $5.5 million in FY26 and $10 million in FY27.
The commodities sector remained a focal point, with stocks such as Mineral Resources (ASX:MIN) (+11.5%), Pilbara Minerals (ASX:PLS) (+7.1%), Fortescue Metals Group (ASX:FMG) (+4.1%), Paladin Energy (ASX:PDN) (+3.7%), and BHP Group (ASX:BHP) (+2.4%) recording strong gains. The rally was fueled by China’s data and an oversold bounce in the market. Gold briefly crossed the US$3,000 per ounce mark, although prices were lower in Australian dollar terms.
