The Australian share market bounced back strongly on Tuesday, with the benchmark S&P/ASX 200 Index climbing 1.7 per cent by midday, as investors regained confidence following a turbulent start to the week. The index added 122.9 points to reach 7466.2, recovering a significant portion of Monday’s steep 4.2 per cent fall. The broader All Ordinaries Index also rose 1.8 per cent, lifted by gains in technology and consumer stocks.
Tech Sector Leads Recovery
The rally was spearheaded by a resurgence in the technology sector, which had been among the hardest hit during the previous session’s sell-off. Companies such as WiseTech Global, Xero, and NextDC recorded notable gains as bargain hunters returned to the market. Investor appetite was bolstered by gains in Chinese equities and improving sentiment in US futures markets.
“The sharp rebound in local tech stocks shows that investors still see value in high-growth sectors, despite ongoing global uncertainty,” said a Sydney-based portfolio manager.
US and China Trade Tensions Simmer
Overnight on Wall Street, a highly volatile session ended with mixed results. The Dow Jones Industrial Average closed slightly lower, while the Nasdaq and S&P 500 managed modest gains. Investors digested a raft of conflicting headlines, particularly surrounding trade tensions between the US and China.
Former US President Donald Trump made headlines by reiterating his call for a 50 per cent tariff on Chinese goods if elected again, prompting Beijing to threaten strong countermeasures. Chinese state media quoted officials saying that retaliation would be “firm and proportionate,” spurring concerns of a renewed trade war.
In response, Chinese markets opened higher as state support for local industries was expected, while investors anticipated fresh stimulus announcements from Beijing to counter any economic fallout.
Also Read: Southampton Part Ways with Ivan Juric After Relegation Woes Mount
NZ Flags Tariff Challenges
In neighbouring New Zealand, government officials voiced concern that lingering tariffs are hampering the country’s economic recovery. Treasury analysts warned that prolonged trade restrictions could weigh on exports and add pressure to inflation and employment.
These comments underscore the broader regional concern about trade frictions, especially for economies heavily reliant on international trade flows.
Deutsche Bank Forecasts Rate Cut
Meanwhile, Deutsche Bank economists forecast a 50 basis point interest rate cut in May, citing slowing global growth and weaker-than-expected consumer sentiment. The prediction follows a sharp drop in Westpac’s consumer confidence index, which revealed households are increasingly concerned about the economic outlook.
“Higher tariffs and volatile markets are creating an uncertain backdrop for both businesses and consumers,” noted a senior economist at Deutsche Bank. “Policymakers may need to move swiftly to support growth.”
Australian Dollar Slips
Despite the stock market rebound, the Australian dollar weakened, trading at US$0.6025, down 0.48 per cent. Currency traders pointed to heightened geopolitical risks and global risk aversion as key drivers of the currency’s decline.
“Safe haven demand continues to support the US dollar, especially as rhetoric between Washington and Beijing escalates again,” said a forex analyst at a major investment bank.
Volatility Here to Stay
Despite Tuesday’s gains, analysts warn that volatility may persist in the weeks ahead. Global markets remain sensitive to political developments, economic data releases, and central bank policy shifts.
BlackRock, the world’s largest asset manager, released a report stating that market turbulence is likely to continue “for some time,” driven by structural shifts in trade, monetary policy, and corporate earnings expectations.
Outlook
While Tuesday’s rebound offered some respite to investors, market participants are urged to remain cautious. The combination of geopolitical uncertainty, unpredictable economic indicators, and sensitive equity valuations may continue to influence trading decisions.
“Investors should brace for more chop in the markets,” said an equity strategist. “There are still many moving pieces in play—from tariffs and rate cuts to global demand concerns.”
As the ASX fights to reclaim lost ground, all eyes will be on the next wave of economic data and corporate earnings to provide direction in an increasingly complex investment environment.
