Market wrap: Softening US tariff talk leads to lift on local bourse

President Trump’s hawkish tariff talk has softened and the local bourse soaked up the resulting Wall St boom.

The Australian sharemarket edged higher on Tuesday, propelled by Wall Street’s overnight boom thanks to US President Donald Trump’s suggestion of softer, more sector-specific tariffs.

The benchmark ASX 200 climbed 5.6 points, or 0.07 per cent, to close at 7942.5 points, while the broader All Ordinaries added 8.8 points or 0.11 per cent, to 8166.7 points.

The Aussie dollar was up 0.07 per cent to finish the day at US62.9c.

Eight out of 11 industry sectors ended in the green, with IT and financials leading the gains.

The market has been wary of President Trump’s ‘Liberation Day’ set for April 2, however overnight on Monday the President said his tariff rollout would subject countries to individually tailored taxes.

“I may give a lot of countries breaks,” President Trump said after claiming his nation had been “ripped off by every country”.

“They’ve charged us so much that I’m embarrassed to charge them what they’ve charged us. But it’ll be substantial, and you’ll be hearing about that on April 2,” President Trump continued.

“There has been a noticeable softening in Trump’s hawkish tariff rhetoric (since mid-March). This has coincided with a relief rally in global equity markets,” IG Australia market analyst Tony Sycamore said.

The Dow Jones lifted 597.9 points, or 1.42 per cent, to finish at 42,583.32 points, while the broader S and P 500 rallied 1.76 per cent to 5767.57.

The tech heavy Nasdaq rose 2.27 per cent to 18,188.59.

Big movements in US tech stocks and other “risk-on assets” implies “investors believe markets have bottomed and that stocks could continue to rally ahead of April 2”, Moomoo market analyst Jessica Amir said.

The ASX200 edged higher on Tuesday. Picture: NewsWire / Max Mason-Hubers

“Investors are instead focused on the hallmark moment: stocks are not only continuing to move up off their March 11 lows, but pinned-up stocks such as Tesla and those in the Nasdaq-100, are closing at their highs of the day with strong buying volume.”

That sentiment flowed into the local bourse, which jumped at opening bell.

WiseTech Global advanced 3.8 per cent to $85.18 a share, while Xero climbed 1.27 per cent to $160 and Life360 soared 5.3 per cent to $21.44.

The financial sector gave the sharemarket another push even though Commonwealth Bank was the only one of the big four to finish in the green, up 0.68 per cent to $148.63.

NAB fell 0.47 per cent to $33.75, Westpac slipped 0.61 per cent to $31.08 and ANZ slumped 3.18 per cent to $28.59.

Macquarie Group rallied 2.62 per cent to $204.70.

Australian investors awaited the federal budget on Tuesday night, followed by national inflation data coming out on Wednesday.

“While investors watch the Treasurer explain how he’s going to defend Australia’s trade balance in the face of Trump’s new tariffs, they might want to consider defensive sectors”, Ms Amir said.

Mr Sycamore said no major policies are expected to be announced in the budget.

The biggest winner was Gold Road Resources after their rejection of a hostile takeover bid elevated the stock 13.88 per cent to $2.79.

James Hardie was the biggest loser slipping, 5.02 per cent to a 21-month low of $37.99 as investors remained concerned over its acquisition of US peer AZEK.