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Highlights
- ASX200 rises amid global inflation and tariff worries
- Materials and industrials sectors support early gains
- Energy sector faces pressure from strong US dollar
Despite headwinds from global markets, the S&P/ASX200 index managed to inch upward during early trading, reflecting investor confidence in certain sectors of the Australian economy. By 10:30am AEST, the benchmark index added 15.8 points, or 0.19%, reaching 8,412.7. This marks a 0.77% gain over the past five trading days, putting it 2.35% below its 52-week high.
The market movement came against a backdrop of caution in the US, where inflation concerns and potential tariff implications have stirred uncertainty. John Williams, CEO of the Federal Reserve Bank of New York, voiced apprehensions about inflation expectations becoming unanchored. The University of Michigan's preliminary data for May showed one-year inflation expectations rising to 7.3%, a figure that has caught the attention of US policymakers.
This has reinforced the Federal Open Market Committee’s cautious stance, with the next potential rate adjustment anticipated around September, depending on how tariff-related economic data unfolds.
On the local front, the energy sector experienced modest pressure, dipping 0.05% due to a stronger US dollar, although oil prices showed upward movement amid fears of supply disruptions.
Among the 11 sectors on the ASX200, six saw gains during the early session. The materials sector led the way with a 0.13% increase, buoyed by key mining players. The industrials sector also advanced by 0.08%, while financials inched up 0.02%. These movements suggest a level of resilience among core sectors, even as global economic uncertainty lingers.
Notable companies contributing to today’s performance include BHP Group (ASX:BHP), which helped support materials, and Xero Limited (ASX:XRO), offering stability in the tech space. Meanwhile, CSL Limited (ASX:CSL) added strength to the healthcare segment, and Woodside Energy Group Ltd (ASX:WDS) played a role in the day’s energy narrative.
While some investors remain cautious, attention is turning toward ASX dividend stocks, particularly those offering consistent payouts amid market fluctuations. These stocks are increasingly in focus as a source of potential income during periods of heightened volatility.
International concerns persist, the Australian share market is demonstrating underlying stability, supported by sectoral gains and a cautiously optimistic outlook on economic policy both domestically and abroad.
