Market Forecast for March 31st, 2025: Bullish Sentiment
Looking back at last week, the ASX 200 managed to stay relatively unscathed despite the turmoil in the US markets, which closed down for the fifth time in six weeks. The Australian index ended the week with a 0.16% increase, marking a 0.64% gain for the week. This positive trend in the ASX for the second consecutive week may appear optimistic, but the sector performance reveals a shift towards defensive stocks. Utilities saw the most significant gain at 1.8%, while information technology took the biggest hit with a 2.4% decline. Defensive sectors like consumer staples, energy, basic materials, and financials closed higher, while consumer discretionary, industrials, and healthcare, along with technology, experienced price drops. Gold achieved another record high during the week.
The market in the US took a nosedive following the announcement of a 25% tariff on imported cars, leading to a week-long decline. This was exacerbated by disappointing inflation data and a drop in consumer sentiment, reaching an expected inflation level not seen since March 1993. The Dow Jones closed the week down by 0.96% and 1.69% on the final trading day, while the S&P 500 and Nasdaq fell by 1.53% and 2.9%, respectively.
Looking ahead to the new week, significant economic data releases are anticipated to drive market movements. In Australia, an interest rate decision and various Purchasing Manager Indexes (PMIs) will influence market behavior. The most pivotal event is set to occur on April 2nd, known as “Liberation Day” in the US, as reciprocal tariffs are scheduled to go into effect. Although investors have responded with caution due to hints of “flexibility” in the president’s statements, the impact of these tariffs, including those on automobiles, remains uncertain.
Key economic events and data releases to watch out for include the Chicago Purchasing Manager Index and Dallas Fed Manufacturing Business Index on Monday, Australia’s retail sales data and interest rate decision on Tuesday, and US employment data and factory orders on Wednesday. Thursday will see the release of US jobless claims and PMIs, followed by comprehensive unemployment data on Friday.
In terms of new listings and IPOs, the market is experiencing a slowdown, with one withdrawal last week and only Marimaca Copper Group scheduled to list on April 2nd. Stormeur Group and Siguiri Gold are set for future listings.
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