The Australian sharemarket rallied in early trading on Tuesday, buoyed by a surge in energy stocks and improved global sentiment following promising developments in US-China trade negotiations. The benchmark S&P/ASX 200 Index gained 63.1 points, or 0.72 per cent, to reach 8578.8 by midday AEST, with broad-based gains across nine of the 11 major sectors.
Investors brushed aside a mixed session on Wall Street overnight, focusing instead on signs of progress in talks between US and Chinese officials currently taking place in London. The renewed diplomatic engagement sparked optimism that tensions between the world’s two largest economies may ease, lifting risk appetite globally.
Energy Stocks Drive Market Gains
The standout performers of the session were energy stocks, which rallied on the back of strong oil prices and a rosier demand outlook. Oil futures remained firm, supported by expectations of tighter global supply and hopes that a US-China trade breakthrough could stimulate global economic activity.
Figure 1: US vs China
Woodside Energy, Santos, and Beach Energy all posted notable gains, helping the energy sector outperform. Woodside added 1.6 per cent, while Santos advanced 2.1 per cent. The sector’s rally was underpinned by a combination of macroeconomic optimism and recent production reports that reinforced strong fundamentals in the oil and gas space.
“The momentum in the energy sector reflects the market’s confidence in a sustained recovery in global demand,” said Mark Ellison, portfolio manager at Argo Investments. “Investors are clearly rotating into cyclicals, particularly those linked to commodities and export-driven revenue.”
Gold Miners Under Pressure
On the flip side, gold miners weighed on the index. Four of the five worst-performing large-cap stocks on the ASX were gold-focused, including Evolution Mining, Northern Star Resources, and Newmont Corporation. The group fell between 1.5 to 3 per cent as the prospect of improved global relations reduced the appeal of safe-haven assets like gold.
Gold prices have remained relatively stable in recent weeks, but the market’s risk-on tone and declining volatility are dampening sentiment toward the precious metal. This shift is prompting investors to pivot away from defensive positions in favour of growth and cyclical sectors.
“The weakness in gold miners is a natural consequence of market optimism,” said Sarah Lau, commodities analyst at AMP Capital. “If the trade situation continues to improve and equity markets remain buoyant, we could see further capital outflows from traditional hedges like gold.”
Bitcoin Nears All-Time High
Digital assets also joined the global rally, with Bitcoin climbing close to its all-time high. The cryptocurrency was trading just below the $70,000 mark in midday trade, fuelled by growing institutional interest and broader confidence in alternative investments.
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The strength in crypto markets lifted related ASX-listed stocks, such as SelfWealth and Iris Energy, which saw heightened volumes and modest gains. Analysts expect the cryptocurrency market to continue attracting attention amid a backdrop of easing monetary policy and innovation in blockchain technologies.
Positive Momentum Across Asia
The bullish sentiment extended across Asia, where major indices in Tokyo, Hong Kong, and Shanghai all moved higher. Japan’s Nikkei 225 rose 0.8 per cent, while Hong Kong’s Hang Seng climbed 1.1 per cent as traders welcomed signs of geopolitical stability.
Asian markets are also responding to the latest signals from the US Federal Reserve, which suggested last week that rate cuts could be on the table later this year if inflation trends lower. This dovish pivot is adding fuel to the global equity rally.
IPO Reforms and Trading Halts in Focus
Locally, corporate and regulatory developments also drew attention. The Australian Securities and Investments Commission (ASIC) announced a series of reforms aimed at revitalising the domestic IPO market. The changes include streamlined listing procedures and new disclosure frameworks, designed to attract more high-growth businesses to the ASX.
“These reforms could be a game-changer for startups and scale-ups looking to go public,” said Joe Longo, ASIC Chairman. “We want to support innovation while maintaining market integrity.”
Separately, shares in building and restoration company Johns Lyng Group entered a trading halt, pending a significant announcement. Market speculation suggests the company may be preparing for a capital raising or acquisition, though no details were confirmed at the time of writing.
Outlook: Bullish Trend May Persist
With investor sentiment turning decidedly bullish, analysts predict the ASX 200 could soon challenge its all-time high, especially if global macroeconomic trends remain supportive. Key drivers will include upcoming inflation data, corporate earnings, and further signals from central banks about future interest rate paths.
“Momentum is back, and market breadth is improving,” said Rachel Koh, equity strategist at Bell Potter. “While short-term corrections are always possible, the medium-term outlook is constructive.”
As global markets lean toward risk-taking, Australia’s equity market is increasingly viewed as a beneficiary of improving trade flows, strong commodity exposure, and a relatively stable economic backdrop.
