ASX 200 Extends Decline in Afternoon Trade
The Australian share market extended its losses in afternoon trading on Monday, with the S&P/ASX 200 falling further after an early high. As of 3:01 pm AEST, the benchmark index was down by 66.70 points or 0.81%, sitting at 8,171.30. Despite hitting a fresh 20-day high earlier in the session, sentiment has turned more cautious as investors continue to digest tumbling oil prices and weaker performances in the technology and energy sectors.
The latest figures indicate a deeper dip compared to earlier in the day when the index was down 0.67 percent. While the ASX 200 has still managed a gain of 2.55 percent over the last five trading days, it remains broadly flat on a year-to-date basis.
ASX 200 Retreats After Setting a 20-Day High
The Australian share market slipped into negative territory on Monday, reversing earlier gains after setting a 20-day high. As of 1:59 pm AEST, the S&P/ASX 200 was down by 55.10 points or 0.67 % to 8,182.90. The pullback comes despite the index showing strong performance in the past week, gaining 2.69 % over the last five trading sessions. However, on a year-to-date basis, the ASX 200 remains broadly flat.
ASX 200 Performance (5 May 2025)
Energy and Financial Stocks Lead Losses
The decline on Monday was largely driven by steep falls in the energy and financial sectors, which dragged the broader index lower. Market activity also reflected growing concerns around global commodity prices, particularly crude oil, which experienced a sharp drop in overnight trading following a decision by OPEC+ to ramp up production.
Sector-wise, eight of the eleven major industry categories ended the session in the red. The hardest hit was the energy sector, which plunged by 2.69 %. This decline was closely followed by the financial sector, which dropped 1.44 %, reflecting investor caution as oil prices fell and the broader economic implications of rising supply and slowing demand began to settle in. Telecommunication services, information technology, and real estate also registered losses, albeit on a smaller scale, with declines of 0.68 %, 0.49 %, and 0.35 % respectively.
Gains in Industrials, Utilities, and Health Care
On the other hand, there were some pockets of strength. The industrials sector gained 0.42 %, supported by select infrastructure and engineering firms. Utilities added 0.25 %, continuing their role as a defensive hedge amid market uncertainty. Health care stocks were largely flat but managed a modest gain of 0.05 %.
Top Performing Stocks
Among individual stocks, Gold Road Resources stood out as the top performer on the ASX 200, rising by 9.43 % to close at $3.25. The gold miner’s rally was driven by both strong investor interest and a notable increase in trading volume, which surged to 16.8 million shares — over 700 % higher than its 90-day average. Block Inc also gained solid ground, climbing 5.35 % to $71.11. Generation Development Group rose 4.10 %, Lifestyle Communities was up 3.45 %, and IDP Education rounded out the top five gainers with a 3.00 % rise.
Biggest Decliners of the Day
On the downside, Nuix Limited recorded the steepest loss, falling 6.28% to $2.39. The data analytics company has been under pressure amid questions around growth outlook and profitability. Stanmore Resources dropped 5.58 %, with falling coal prices weighing on its share price. Helia Group also declined 5.57 %, while Capstone Copper and SiteMinder lost 4.72 % and 4.30%, respectively.
Volume Spikes Signal Increased Investor Activity
Trading volumes were significantly higher for some stocks compared to their long-term averages. Sonic Healthcare saw a 1620 % increase in volume, trading 6.78 million shares. Block Inc experienced a 1153 % surge in volume, while Origin Energy and Breville Group also reported much higher-than-normal trading activity, indicating intensified investor focus.
Oil Prices Fall Below $US60 After OPEC+ Output Hike
Global factors also played a major role in shaping market sentiment. Oil prices plunged to multi-month lows as traders reacted to a weekend meeting of OPEC+ ministers who agreed to accelerate oil production hikes. Brent crude fell by $2.04 or 3.3 % to settle at $59.25 a barrel. Meanwhile, West Texas Intermediate dropped by $2.10 or 3.6 % to $56.19 a barrel. This marks a significant shift in global energy dynamics and has direct implications for Australian energy stocks, many of which were hammered during the session.
The decision to raise output by 411,000 barrels per day in June marks the second consecutive month of production increases. Since April, total additional output will approach one million barrels per day, effectively reversing much of the production restraint imposed in 2022. Commodities analyst Vivek Dhar from the Commonwealth Bank observed that the move appeared designed to penalise OPEC+ members such as Iraq and Kazakhstan, who have exceeded their production quotas. However, he also suggested a more strategic motive — namely, a quiet shift from supporting high oil prices to regaining market share.
Outlook: Lower Oil Prices May Persist
Dhar noted that with global oil supply likely to outpace demand in the second half of 2025, defending a price point around $70 per barrel may no longer be feasible. He projected Brent crude to average $65 per barrel for the remainder of the year, with the potential to fall closer to $60 if Iranian oil exports are allowed to continue amid inconsistent enforcement of US sanctions. The drop in oil prices is expected to pressure higher-cost producers, particularly in the US shale industry, which may be forced to reduce output if prices remain depressed.
In the Australian context, this could mean continued pressure on local energy stocks and a recalibration of investor expectations in the resources sector. It also brings into focus the impact of global supply decisions on domestic markets, especially given Australia’s status as a major energy exporter.
Investors Remain Cautious Amid Global Volatility
Overall, Monday’s market action underscores the influence of international developments on the Australian bourse. While the ASX 200 remains on solid footing after recent gains, external shocks like oil price volatility and sector-specific pressures continue to pose headwinds. Investors are likely to remain cautious in the short term, closely watching commodity markets, earnings announcements, and central bank policy cues for guidance.
