While inflation concerns and tariff impacts weighed on US markets overnight (AEST), the Australian Securities Exchange (ASX) shifted back into positive territory.
The S&P/ASX200 edged up 15.8 points, or 0.19%, to 8,412.7 points by 10.30am (AEST).
Over the past five trading sessions, the index has gained 0.77% and is 2.35% off its 52-week high.
ANZ Head of Australian Economics Adam Boyton says inflation concerns continue to worry US policymakers.
Federal Reserve Bank of New York CEO John Williams voiced concerns about the risk of inflation expectations becoming unanchored.
“Short-term inflation expectations surged recently on the back of tariff concerns, with University of Michigan’s preliminary May one-year inflation expectations up at 7.3%,” Boyton says.
Boyton adds that Williams’ comments affirm the US Federal Open Market Committee’s “wait-and-see approach”.
“Where tariff rates settle and what they mean for domestic macro configuration will determine the timing of the Fed’s next move,” Boyton says.
“We expect the earliest the Fed will have room to cut rates will be at its September meeting.”
Investor appetite for commodities has also come under pressure with the strengthening US dollar. However, oil prices rose on possible supply disruptions.
This saw the energy sector slip back 0.05% in early trade.
Six of the 11 sectors got a lift up. Materials led early trade with a 0.13% move up, industrials rose 0.08% and the financial sector was up 0.02% not long after the opening bell.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: iStock
