Your Market Update - Summary
The ASX 200 Accumulation Index gained 3.6% in April, paring back some of the losses from February and March. Volatility was again a feature of the ASX 200 Index in April; however, the month finished strongly, ending a run of losses.
The market experienced a sharp sell-off following the ‘Liberation Day’ US tariff announcements. However, a strong rally ensued, driven by the Trump administration’s subsequent 90-day pause on tariffs. Additionally, the local market welcomed inflation remaining within the target band, increasing the likelihood of a rate cut by the Reserve Bank of Australia (RBA) in May.
Ten of the eleven sectors were gainers, led by Communications (+6.5%), Information Technology (+6.4%), Property (+6.4%), and Consumer Discretionary (+6.1%). The lone laggard was Energy (-7.7%). Communications stocks were supported by investors seeking defensive positions. Telstra (ASX: TLS) and REA Group (ASX: REA), the largest companies in the sector, both performed strongly through April.
Meanwhile, rate-sensitive sectors such as Property and Consumer Discretionary benefited from the greater chance of the RBA making a second cut in the cash rate target at its May meeting.
The price of Brent oil fell in April and, subsequently, the Energy sector declined, with Woodside Energy (ASX: WDS) and Beach Energy (ASX: BPT) among the major losers.
Global equities declined in April amid renewed US/China trade tensions, sharp swings in yields and a broader deterioration in investor sentiment.
Developed Markets fell 1.84% (MSCI World Ex-Australia Index (AUD)), while Emerging Markets also declined 1.33% (MSCI Emerging Markets Index (AUD)).
Markets swung sharply after sweeping ‘Liberation Day’ tariffs triggered a global sell-off, before sentiment stabilised on softer US rhetoric. US markets underperformed, with the S&P 500 down 0.68%. Equities sold off sharply early in the month after President Trump announced blanket tariffs on all imports, triggering the worst two-day decline since 2020. A 90-day pause and selective exemptions helped markets rebound, including the S&P 500’s best single day gain since 2008.
Still, the economy contracted 0.3% in Q1, business activity softened, and inflation eased to 2.4%, while corporate earnings beat estimates despite margin and labour concerns.
European equities were mixed, with the FTSE Eurotop 100 Index falling 1.50%. The ECB cut rates to 2.25% and signalled more easing as tariff uncertainty weighed on exporters. Domestically oriented sectors and defensives fared better. Germany’s DAX rose 1.50% on fiscal optimism, while the UK’s FTSE 100 slipped 0.66%.
Japanese equities posted modest gains, with the Nikkei 225 up 1.21%. Despite headwinds from yen strength and trade disruptions, sentiment was lifted by a surge in corporate buyback announcements and resilient domestic flows. The Bank of Japan held rates steady while cutting its growth outlook.
Emerging Markets declined, led lower by China. The CSI 300 fell 2.86% and the Hang Seng dropped 4.02% amid escalating tariff retaliation. In contrast, Latin America outperformed, with the MSCI LatAm Index rising 6.5%, driven by strong performance in Mexico (+13.9%) which avoided new tariffs.
The S&P/ASX 200 A-REIT Accumulation Index TR significantly reversed the negative trend seen in previous months, finishing April up 6.35%. The Index remains in negative territory YTD, although marginal, down 0.9%.
Global real estate equities fell, decreasing by 0.73% (represented by the FTSE EPRA/NAREIT Developed Ex Australia Index (AUD Hedged)).
Australian infrastructure continued to rise, with a return of 2.4%. The index has delivered a return of 4.7% YTD.
The Australian residential property market experienced an increase of 0.2% Month on Month (as represented by CoreLogic’s five capital city aggregate). Growth was felt in all capitals for the first time in a significant period. Darwin continued to be the biggest riser (+1.1%), closely followed by Hobart (+1.0%). Melbourne continues to rise but remains in negative territory over the previous 12-month period (+0.2%, -2.2% YoY). Perth continued to moderate (+0.4%, 10.0% YoY), with most remaining capitals seeing monthly growth around the same.
It’s no surprise that the bond market experienced another volatile month, as President Trump’s reciprocal tariffs—announced on what was dubbed “Liberation Day”—sent shockwaves through global markets.
While equities fell sharply, bond markets were also rattled, with yields initially spiking due to heightened uncertainty. This raised concerns within the Trump Administration, prompting a 90-day pause on the tariffs shortly after the announcement. The pause led yields to fall, as investors sought safety in government bonds. Despite this move, market participants remain wary of ongoing U.S.–China trade tensions, with neither country showing signs of easing their tariff stance.
Against this backdrop, U.S. 10-year Treasury yields fell 5 basis points from 4.21% to 4.16%, while 2-year yields dropped more sharply by 28 basis points, from 3.90% to 3.62%.
Local Australian markets were also impacted by the reciprocal tariffs. However, the RBA noted that it was well positioned to handle any uncertainty surrounding monetary policy. Although inflation was gradually easing, the RBA held firm in its decision to keep the cash rate unchanged. The broader influence of overseas market volatility led to a drop in Australian bond yields, with the 10-year yield falling 22 basis points from 4.38% to 4.16%, and the 2-year yield falling 40 basis points from 3.69% to 3.29%
