Australia 200 afternoon report: 8 April 2025

The Australia 200 trades 109 points (1.49%) higher at 7453 as of 1.30pm (AEDT).

ASX 200 rebounds amid trade tensions

The Australia 200 has staged an impressive recovery today despite China's Ministry of Commerce vowing to 'fight until the end' if United States (US) President Trump follows through on his overnight threat of an additional 50% tariff should Beijing refuse to back off its retaliatory measures.

If China digs in, tariffs on its US imports could surge to a staggering 104%, a bleak scenario for Australia's trade-dependent economy and a potential catalyst for another round of broader risk aversion.

US 500 futures and high trading volumes

The Australia 200's bounce today has also been buoyed by US 500 futures, which were up 80 points (1.63%) at 5180 at the time of writing.

Both US equity markets and the Australia 200 have seen massive trading volumes over the past three sessions (Thursday, Friday, and Monday), likely fuelled by margin calls, capitulation, and trend-following hedge funds piling into shorts.

RBA rate cut expectations

The dovish shift last week towards expecting more Reserve Bank of Australia (RBA) interest rate cuts this year appears well-founded, following the Westpac Consumer Confidence survey for April, which plunged 6 points to 90.1 - the first decline since January. The drop highlighted mounting concerns about global events, particularly Trump’s 'reciprocal tariffs,' indicating a real threat of deeper sentiment slumps in the months ahead.

Australia 200 stocks

Mining sector

Goldman Sachs, the US investment bank, predicts that last week's new 34% tariff on China will shave at least 0.7 percentage points off China's gross domestic product (GDP) this year. This is likely to prompt Chinese policymakers to roll out more easing measures soon - a prospect that lifted major miners today.

• Fortescue jumped 4.26% to $14.90
• BHP rose 2.23% to $35.33
• Rio Tinto gained 1.61% to $110.15
• Mineral Resourcesedged up 1.14% to $16.91

Technology sector

With investor risk sentiment souring and the volatility index (VIX) spiking above 60 overnight, conditions are ripe for a brutal short squeeze, led today by Australia 200 tech stocks.

• Block rocketed 10.89% to $85.20
• Appen climbed 8.33% to $0.85
• Zip surged 8.40% to $1.29
• Life360 advanced 7.33% to $17.92

Financial sector

• Macquarie surged 2.31% to $176.56
• Commonwealth Bank of Australia gained 1.58% to $146.72
• ANZ added 0.13% to $26.86
• NAB edged 0.06% to $32.20
• Westpac traded flat at $29.27

Australia 200 technical analysis

From its mid-February high of 8615, the Australia 200 fell 882 points (10.23%) to a low of 7733 (Wave I or A from Elliott Wave Analysis) in mid-March, before rebounding to a high of 8014 (Wave II or B). The decline from the 8014 high to yesterday's 7169.2 low appears to be a Wave III or C lower.

At yesterday's low, it fell just 37 points short of a wave equality target of 7132. This is more indicative of a corrective Wave C than an impulsive Wave III lower, implying that the entire decline from the 8615 high has been a correction rather than the start of a protracted bear market.

At the very least, we suspect the Australia 200 is close to a bottom or has bottomed for now at yesterday's 7169.2 low and can see a bounce back towards the 7550 area.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 8 April 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}