ASX rallies to 11-week high on a temporary tariff pause

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ASX rallies to 11-week high on a temporary tariff pause

A trade deal between the US and China led to a rally on the ASX, with energy and information technology stocks leading the way.

The benchmark ASX 200 index gained 35.50 points or 0.43 per cent to 8,269, with six of the 11 sectors finishing in the green.

The broader All Ordinaries also jumped 43.70 points or 0.52 per cent to 8,510.70.

The *********** dollar jumped 0.71 per cent and is now buying 64.16 US cents.

Camera IconThe ASX rose on the back of a US- China trade deal. Photo: Gaye Gerard / NewsWire Credit: News Corp Australia

Australia’s sharemarket jumped after US President Donald Trump announced the White House was cutting tariffs to 30 per cent and China’s tariffs will be reduced to 10 per cent for the next 90 days.

Businesses directly linked to the US or China were among the major winners during Tuesday’s trading.

Payment providers Block shares soared 5.86 per cent to 84.90 while Zip also jumped 8.77 per cent to $198, on the back of the trade pause which is predicted to boost US consumer activity.

Corporate Travel Management, which previously flagged pressures on its US business also soared 9.94 per cent to $13.27 as did fellow travel business Flight Centre also finished higher up 5.21 per cent to $13.74.

Kitchen appliance maker Breville Group initially soared following the trade announcement before settling up 7.76 per cent to $32.77 on trade boost.

The major miners also jumped, with BHP finishing up 2.11 per cent to $39.21, climbing 2.13 per cent to $119.85 and Fortescue Metals leading the way up 2.66 per cent to $16.60.

Capital. Com senior financial market analyst Kyle Rodda said the *********** market followed a strong bounce in US markets.

“There was some strength in energy and tech stocks matching the rally we saw on Nasdaq overnight and overall a much more buoyant market sentiment,” he said.

“There was some confidence in the

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that although there might be a hit to global growth, perhaps it will be little more than a short, shallow downturn and investors can look beyond that and go back into equities.”

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Mr Rodda said the market was jumping on cyclicals which could be the winners from the trade announcements.

“Energy is a really clear example just because of how much oil prices moved and how much downside there was for oil if tariffs remained in place and global trade slowed considerably,” he said.

The ‘risk on’ market rally had an impact on some of the more defensive parts of the market with consumer staples, telcos and utilities underperforming.

The two major supermarket chains were among the most heavily sold off with Woolworths shedding 3.7 per cent to $31.56 and Coles slumping 3.4 per cent to $21.52.

It was also a mixed day for Australia’s big four banks, with the index overall underperforming, although still closed in the green, rising 0.1 per cent.

On a positive note, Westpac gained 1.8 per cent to $31.64 and ANZ added 0.5 per cent to $28.51 while CBA dipped 0.6 per cent to $166.14 and NAB fell 0.2 per cent to $35.61.

Pharmaceutical stocks also rebounded from a steep sell-off in recent weeks, on the back of Mr Trump signing an executive order to slash the price of prescription drugs in the US.

This is thought to have an impact on prices other countries will pay for their medicines including Australia.

Clarity Pharmaceuticals soared 15.3 per cent to $2.57, while Telix Pharmaceuticals were up 3.64 per cent to $25.36.

In corporate news PolyNovo was among the top gainers surging 14.3 per cent to $1.67 after announcing a successful human trial on its BTM device used to treat and manage type-1 diabetes.

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#ASX #rallies #11week #high #temporary #tariff #pause

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