Market wrap: ASX200 soars on Trump tariff relief rally

An exuberant relief rally added $116bn in value to the Australian sharemarket on Thursday following US President Donald Trump’s decision to pull back from a sharpening global trade war.

The benchmark ASX200 gained 334.6 points, or 4.54 per cent, to close at 7709.6, marking its best session since June 2020.

The broader All Ordinaries index lifted 352.2 points, or 4.66 per cent, to 7913.9.

All 11 industry sectors surged higher, led by IT with a 7.57 per cent leap and materials with a 6.33 per cent gain.

Tech darling Xero jumped 6.23 per cent to $156.09 a share, while Wisetech Global soared 8 per cent per cent to $85.21 and TechnologyOne advanced 8.1 per cent to $27.97.

Bourse heavyweight BHP rallied 5.4 per cent to $36 as Singapore iron ore futures lifted 0.9 per cent to $95.65.

Rio Tinto jumped 6.35 per cent to $110.59 and Fortescue advanced 6.2 per cent to $15.08.

The uranium miners boomed, with Boss Energy rocketing higher 17.49 per cent to $2.62 and Deep Yellow leaping 15.92 per cent to 91c.

Energy stocks recovered some heavy losses following Mr Trump’s Liberation Day shock in early April and a subsequent slump in oil prices.

Woodside Energy rallied 4.7 per cent to $20.05 and Santos gained 4.12 per cent to $5.56.

The week’s chaos and despair switched to euphoria overnight on Wednesday after Mr Trump announced a 90-day pause on reciprocal tariffs for most major trading partners, excluding China.

Wall St boomed on the news, gaining some $7t in market value.

The Dow Jones added 2962 points, or 7.87 per cent, to settle at 40,608, the S and P 500 index soared 9.52 per cent to 5456.9 points and the tech-heavy Nasdaq index lifted 12.16 per cent to 17,124.

“The ASX200 has enjoyed some of the spoils of the global relief rally,” Capital.com senior financial market analyst Kyle Rodda said.

“Although the moves were a fraction of what was seen on Wall Street, the markets are discounting a ‘less-bad’ growth outlook for the domestic and global economy.

“They are also embracing the fact that although his behaviour is economically harmful, serious ructions in the financial world, like those that appeared to be building in global bond markets, appear enough to quell some of US President’s most hawkish impulses on trade.”

IG markets analyst Tony Sycamore said surging yields on US treasuries may have triggered Mr Trump’s backflip rather than steep losses on equity markets.

“The catalyst behind Trump’s backflip overnight was likely evidence of worrying dislocation within the fixed-income market yesterday,” he said.

“This included surging bond yields when they should have been falling, possibly due to hedge funds being forced to liquidate positions due to margin calls.

“While Trump seemed willing to tolerate deep equity market losses, his about-face provides another reminder that the bond market remains the ultimate master of markets and politicians alike, given its role as the ‘plumbing’ of the financial system.”

In explaining his decision, Mr Trump said people were getting “yippy”.

“I thought that people were jumping a little bit out of line,” he said.

“They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid.”

Mr Rodda warned volatility in equities would likely remain until the US-China tete-a-tete was resolved.

“The US’ 125 per cent tariff on China and the 84 per cent tariff the Chinese have retaliated with, is awful for the global economy and equity markets,” he said.

“If the US had originally announced such a policy last week, the markets probably could have responded bearishly and priced-in higher odds of a recession.

“As the dust settles after last night’s rebound, investors will be looking for improvements in US and China trade relations, on top of other trade deals, to extend the recovery from here.”

Australia’s big four banks all rallied, with Commonwealth Bank rising 3.61 per cent to $154.53, NAB climbing 4.87 per cent to $33.82, Westpac adding 4.94 per cent to $30.61 and ANZ lifting 3.47 per cent to $27.43.

In corporate news, the competition watchdog approved Qube’s proposed acquisition of Melbourne International RoRo and Auto Terminal.

Stock in the logistics and infrastructure company advanced 3.52 per cent to $3.82.

The Aussie dollar gained 0.75 per cent to buy US62c at the closing bell.

The biggest gainer on the benchmark was Zip Co, leaping 20.6 per cent to $1.46.