The Australian stock market closed lower on Friday as losses in the technology, mining, and materials sectors dragged the S&P/ASX 200 down 1.16%. The benchmark index hit a one-month low, reflecting growing concerns about economic stability and investor sentiment.
The downturn followed a global trend of market losses, driven by economic uncertainty and policy risks. Falling stocks outnumbered advancing ones by 818 to 334, while 397 stocks ended unchanged. The S&P/ASX 200 VIX, which measures market volatility, rose 2.85% to 11.85, signaling increased caution among investors.
Figure 1: ASX 200 Chart
Sector Performance
- Information Technology: The sector posted significant losses, driven by weaker earnings reports and global tech stock declines.
- Metals & Mining: Falling commodity prices contributed to a sharp decline in mining stocks.
- Materials: Concerns over slowing global demand weighed on key materials stocks.
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Top Gainers and Losers
- Waypoint REIT Ltd (ASX: WPR): Up 2.99% to $2.41
- Harvey Norman Holdings Ltd (ASX: HVN): Gained 2.55% to $5.22
- Mesoblast Ltd (ASX: MSB): Rose 2.44% to $2.52
- Vista Group International Ltd (ASX: VGL): Gained 16.44% to $3.40
- Pexa Group Ltd (ASX: PXA): Increased 8.08% to $12.31
- Genusplus Group Ltd (ASX: GNP): Up 7.75% to $2.92
- Appen Ltd (ASX: APX): Dropped 21.21% to $1.31
- IDP Education Ltd (ASX: IEL): Fell 7.80% to a five-year low of $10.05
- St Barbara Ltd (ASX: SBM): Declined 6.52% to $0.22
- Brainchip Holdings Ltd (ASX: BRN): Dropped 18.45% to $0.21
- The Star Entertainment Group Ltd (ASX: SGR): Fell 15.39% to $0.11
- Regal Partners Ltd (ASX: RPL): Down 15.26% to $3.22
Investor Sentiment and Market Trends
Investor confidence remains fragile as market declines accelerate. The S&P/ASX 200 index has dropped more than 4% since hitting a record high of 8,616 two weeks ago. The downturn reflects broader economic concerns, including inflationary pressures and central bank policy uncertainties.
In the U.S., major indices have fallen 2-3% amid investor caution regarding economic policies and trade conditions. Budget cuts introduced by the Department of Government Efficiency (DOGE) have created additional uncertainty, influencing global market sentiment.
The AAII Sentiment Survey showed a sharp rise in bearish sentiment, reaching 60.6%, the highest level since September 2022. This represents the largest weekly increase since August 2019.
Figure 2: AAII Sentiment Survey vs S&P 500 5 years
Bullish sentiment fell to 19.4%, its lowest reading since March 2023. The bull-bear spread widened to -41.2%, indicating declining investor confidence.
Bulls, Not Bears, Going into Hibernation
The AAII Sentiment Survey also tracks Bullish Sentiment, which measures confidence that stock prices will rise over the next six months. This metric dropped 9.8% to 19.4%, the lowest reading since March 16, 2023 (19.2%). The latest figure ranks among the 65 weakest in the survey’s history and remains well below the historical average of 37.5%. This marks the seventh time in nine weeks that optimism has remained below this benchmark.
As a result of shifting sentiment, the Bull-Bear Spread widened to negative 41.2%, the most pessimistic level since September 2022. This also marks the fourth consecutive week that the spread has remained in negative territory.
Additionally, Neutral Sentiment, which measures expectations of a flat market over the next six months, dropped 10.3% to 20.0%. This figure is below the historical average of 31.5%, a threshold that has been undershot in 32 of the past 34 weeks. It is also the lowest neutral reading since September 29, 2022 (19.2%).
Commodities and Currency Markets
- Gold Futures (April): Fell 0.70% to $2,875.64 per ounce
- Crude Oil (April): Declined 0.65% to $69.89 per barrel
- Brent Oil (May): Dropped 0.63% to $73.11 per barrel
- AUD/USD: Decreased 0.40% to 0.62
- AUD/JPY: Fell 0.45% to 93.00
- US Dollar Index: Rose 0.13% to 107.32
ASX Indices Performance
- S&P/ASX 200: Down 1.16% at 8,172.4
- ASX 300: Lost 1.18% to 8,103.9
- ASX 100: Declined 1.17% to 6,859.2
- All Ordinaries: Fell 1.20% to 8,403.9
- ASX Small Ordinaries: Down 1.25% to 3,136.8
Market Outlook
Investors remain cautious as global risks continue to shape market movements. Rising interest rates, inflation concerns, and geopolitical factors are influencing trading activity. Analysts expect market volatility to persist as central banks provide further guidance on monetary policy.
Commodity prices and economic data releases will play a key role in shaping investor sentiment in the coming weeks. Investors will closely monitor corporate earnings and global trade developments to assess potential market trends.
