Australia 200 afternoon report: 4 March 20025

The Australia 200 trades 58 points (-0.70%) lower at 8187 as of 3.00pm (AEDT).

Australia 200 drops amid escalating trade tensions

The Australia 200 fell 94 points in early trading to a fresh seven-week low of 8150.2 before dip buyers emerged to take advantage of its 5.35% pullback from the mid-February 8615 high.

Today's decline followed President Donald Trump's confirmation that a 25% tariff on imports from Mexico and Canada and a 10% levy on Chinese goods would take effect later today.

In response, Canadian Prime Minister Justin Trudeau has already announced retaliatory tariffs on United States (US) imports. Mexican President Claudia Sheinbaum stated that Mexico would wait for US tariffs to be implemented before deciding on retaliatory measures.

Trade tensions dampen global outlook

This trade war escalation comes at a critical time for the US economy. Overnight, the US Institute for Supply Management (ISM) Manufacturing purchasing managers' index (PMI) fell to 50.3 in February from 50.9, highlighting the impact of tariffs. Timothy Fiore, Chair of the ISM, noted that 'demand eased, production stabilised, and destaffing continued' due to the administration's policy.

Australian GDP forecast

At a time when US gross domestic product (GDP) estimates are being slashed, economists are busily adjusting their forecasts upward for tomorrow's Australian fourth quarter (Q4) GDP after today's better-than-expected net exports data.

Australian GDP for the December quarter is expected to rise by 0.7% quarter-on-quarter (QoQ), boosting the annual rate to 1.4%, the highest since Q4 2023. This suggests the Australian economy is on stronger footing than anticipated. Good news if the trade war deepens and if it can help end the 'per capita recession' of seven consecutive quarters of declining per capita GDP.

Australia 200 stocks

Energy sector

Crude oil fell 2% overnight to $68.37 on reports that the Organisation of the Petroleum Exporting Countries (OPEC) will increase supply in April as planned, and the US is considering lifting sanctions on Russia.

• Beach Energy fell 3.5% to $1.38
• Santos lost 3.15% to $6.45
• Woodside Energy dropped 2.4% to $24.64

Mining sector

Concerns over tariffs and trade wars has pushed the iron ore price below $100 for the first time in seven weeks.

• Mineral Resources plunged 7.7% to $22.06
• Fortescue lost 3.56% to $16.12
• BHP fell 0.4% to $39.45

Financial sector

The Australia 200 financial sector remains out of favour, after tumbling 9% from its mid-February high.

• Macquarie dropped 1.25% to $224.17
• NAB fell 0.8% to $35.03
• ANZ slipped 0.4% to $29.46
• Commonwealth Bank of Australia bucked the trend, rising 0.2% to $157.69
• Westpac also gained, adding 0.25% to $31.01

Australia 200 technical analysis

In last Tuesday's Australia 200 afternoon report here we flagged the importance of support in the Australia 200 at 8150 – 8100. 'Last week, the Australia 200 sliced through important support at 8350 – 8360ish opening the way for a deeper pullback into the 8150 – 8100 support area coming from the 200-day moving average and multi-month trend channel support.'

Today saw the Australia 200's pullback hit to the very point, the upper bound of the key support area at 8150 – 8100 before signs of buying emerged.

Providing the Australia 200 remains above 8150 – 8100 and the last bastion of support at 8000, we will allow for the Australia 200 to recover towards 8350 – 8400 in the weeks ahead.

Aware that if the Australia 200 were to see a sustained break below 8150 – 8100 and then below support at 8050 – 8000 (from the December low), it would open the way for the sell-off to extend towards 7600.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 4 March 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.}