Aussie shares lift on Trump trade deal hopes

Perth Now

08-05-2025

Cautious investors pushed the Australian sharemarket higher on Thursday on the prospect of a new Trump trade deal with Britain, even as the US Federal Reserve warned of elevated risks to higher unemployment and inflation in the world's largest economy.
The benchmark ASX200 lifted 13.4 points, or 0.16 per cent, to close at 8191.7 points, while the broader All Ordinaries index rose 21.9 points, or 0.26 per cent, to finish at 8421.7.
Eight of 11 industry sectors ended in the green, led by the defensive utilities sector with a 1.81 per cent rise.
Origin Energy jumped 1.67 per cent to $10.99 a share, while APA Group advanced 1.92 per cent to $8.51.
The staples sector gained 0.86 per cent, with supermarket giant Coles climbing 1.13 per cent to $22.29 and Woolworths adding 1 per cent to $32.83.
Financials proved a drag on the market, losing 0.62 per cent, with banking giant ANZ tumbling 1.93 per cent to $29.40 after reporting mixed half-year results.
The company delivered a record $11bn revenue haul but its net interest margin, a key measure of profitability, slipped to 1.56 per cent.
Westpac lost 4.06 per cent to $30.50 and Commonwealth Bank dipped 0.27 per cent to $165.51, while NAB climbed 1.39 per cent to $36.37.
The big miners were mixed as Singapore iron ore futures fell 1.95 per cent to $96.40 a tonne.
BHP ended the day flat, losing 1c to $37.92, Rio Tinto edged up 0.13 per cent to $116.08 and Fortescue slipped 0.68 per cent to $15.98.
The market fell in early trading but then lifted about 11am AEST after US President Donald Trump posted to Truth Social he would announce a trade deal with a major economic partner, widely believed to be the UK, later on Thursday night.
'Hopes of a possible US-UK trade deal come as US and Chinese officials prepare to hold talks in Switzerland on Saturday,' IG markets analyst Tony Sycamore said.
'These talks could mark the first step in easing trade tensions between the world's top two economies.
'While it would be a net positive if US-China trade tensions were to ease, it is unlikely that any deal will see US tariffs on Chinese imports fall much below 50 per cent.'
Thursday's cautious trading followed a subdued lead from Wall St overnight on Wednesday as investors digested some hawkish rhetoric from US Fed chairman Jerome Powell, who warned bluntly President Trump's tariff policies presented challenges to the central bank's dual mission to control prices and support employment.
'The risks of higher unemployment and higher inflation have risen,' Mr Powell said.
Capital.com senior financial market analyst Kyle Rodda said the Fed was adopting a 'wait and see' approach to the economic shock of Liberation Day.
'Policymakers acknowledged the potential for tariffs to push inflation higher while also dampening growth, a delicate balancing act that leaves the outlook uncertain,' he said. The ASX200 lifted on Thursday in a cautious session. Gaye Gerard / NewsWire Credit: News Corp Australia
'Markets were somewhat underwhelmed by the Fed's reluctance to explicitly commit to future interest rate cuts and to 'look through' one-off inflationary shocks from trade policy.
'However, the central bank stopped short of closing the door on such measures, keeping the prospect open for cuts at coming meetings.'
The Dow Jones rose 284 points, or 0.7 per cent, to 41,113 points, the S and P 500 gained 0.43 per cent to 5631 and the tech-heavy Nasdaq added 0.27 per cent to 17,738.
In local corporate news, toll road company Transurban announced it would cut 300 jobs in a $50m cost-savings push.
Shares in the company jumped 1.68 per cent to $14.55.
Mining and infrastructure services giant Orica leapt 7.4 per cent after reporting a 40 per cent jump in half-year net profits excluding significant items to $250.8m.
Polynovo Limited soared 11.45 per cent to $1.46, making it the top gainer on the ASX200.
The largest laggard was gaming company Light and Wonder, which slumped 8.43 per cent to $133.15 after warning investors new trade policies would add 'incremental cost pressures' to its business.
'These tariffs place additional duties on imports and we currently source a portion of the raw materials and components for our gaming business from China and across Asia,' the company said.
The Aussie dollar lost 0.23 per cent to buy 64.6c at the closing bell.