The Australian share market has shown resilience, with the S&P/ASX 200 closing on a record high of 9,198 points, up by 0.25% for the day. This positive performance contrasts with declines in major international indices, as the S&P 500 and Nasdaq dropped 0.6% and 1.3%, respectively, indicating a divergence in market dynamics.
In the commodities sector, the Australian dollar gained 0.3%, reaching 71.26 US cents, while Brent crude rose slightly to $70.93 per barrel. Spot gold, meanwhile, maintained its value at $5,192 per ounce, and iron ore saw a small increase to $98.30 per tonne. Bitcoin also experienced a mild uptick, trading at $67,887.
A recent report from Canstar highlighted that Australians saved an additional $2.8 billion in January, pushing household deposits among authorised deposit-taking institutions (ADIs) to a record high of $1.72 trillion. This increase reflects a broader trend of cautious consumer behavior in response to economic uncertainties.
The market landscape is further complicated by AMP’s head of investment strategy, who cited stretched equity valuations, political uncertainties stemming from Donald Trump’s influence, and technological volatility as significant risks for investors. Despite these headwinds, there are expectations of positive returns fueled by anticipated Federal Reserve rate cuts and solid profit growth, particularly in the Australian market.
Meanwhile, concerns over the impact of rising living costs on younger Australians continue to grow, as evident from discussions surrounding housing and inflation. As these financial anxieties mount, the implications for economic growth and interest rates remain pivotal, especially with the upcoming release of Australia’s National Accounts for the fourth quarter of 2025.
In corporate news, shares of Coles have faced a challenging week, descending by 7.35% after the supermarket chain reported an 11.3% drop in net profits and grappled with legal issues over misleading promotions. On the other hand, REA Group shares surged by 4.17% on the announcement of a share buyback program.
Australia Post released mixed financial results, reporting a substantial interim profit of $50.4 million despite a decline from the previous year. The surge in parcel volumes highlights the growing demand for eCommerce, even as the letters service continues to operate at a loss due to decreased volumes.
The broader economic context is shifting, with private sector credit growth showing signs of slowing down. This trend aligns with the Reserve Bank of Australia’s recent shift to a more cautious stance on interest rates, leaving the market to ponder the implications for property price growth.
Overall, investors are navigating a complex landscape marked by geopolitical factors, economic indicators, and fluctuations in consumer sentiment as the quarter progresses.
