Australia | Feb 05 2025
This story features EVOLUTION MINING LIMITED, and other companies. For more info SHARE ANALYSIS: EVN
Gains across consumer discretionary and financials helped the ASX200 outperform international equities and record a 4.6% gain in January, but tariff uncertainty clouds the outlook.
-ASX200 gains 4.6% (total return) in January
-Consumer Discretionary and Financials rally
-Gold sector best performed, defensives lag
-Tariff uncertainty, ASX winners & losers
By Mark Woodruff
The ASX200 gained 4.6% (including dividends) in January, reaching new highs and outperforming the S&P500’s 2.8% gain in the US. Macquarie attributes the strength in both markets to a global risk-on rally, further evidenced by a strong small-cap performance in Australia. The ASX200 also received a lift from weaker-than-expected inflation numbers (fueling expectations the RBA might be cutting interest rates soon).
Despite China’s DeepSeek revelation sending shockwaves through the AI trade, the Nasdaq gained 1.64% in January and the ASX All Technology sector posted a 4.69% gain.
The European market led Developed Market equities higher, while Emerging Market equities also advanced, despite Chinese equities declining in Australian dollar terms.
In Japan, equities extended their upward momentum from recent months, whereas New Zealand equities diverged from Australia, with the NZX50 Index losing -1.0% in January.
According to Macquarie, the market in Australia is now pricing in a 95% probability the Reserve Bank will commence a new rate cutting cycle on February 18.
Interestingly, this broker believes rate cuts will support FY26 growth for Domestic Industrials with EPS growth projected to accelerate by 11% for the sector, up from 1.1% in FY25.
By contrast, the Federal Reserve has already been cutting rates and is in no hurry to make further policy rate adjustments, stated Chair Powell, after the Federal Open Market Committee decided to maintain the federal funds rate at the existing target range of 4.25% to 4.50%, pausing after three consecutive rate cuts in the previous months.
Moving forward, analysts generally see an extended hold by the Fed, though some are contemplating a mid-year interest rate cut in the event of upcoming in-line inflation readings.
For the month, the US 10-year yield fell by around -2bps to 4.54% and the 10-year Australian bond yield rose by 6bps to 4.43%.
Higher gold prices and rising geopolitical risks contributed to a 15.2% gain for the Gold sector in January, highlighted by gains in the ASX100 for Evolution Mining ((EVN)), Newmont Corp ((NEM)) and Northern Star Resources ((NST)) of 18.5%, 16.2% and 12%, respectively.
Consumer Discretionary and Financials also performed well with gains of 7.10% and 6.10%, respectively, while defensive sectors such as Utilities, Food & Beverages and Telecommunications all lost ground (indicating a firm Risk On environment).
Growth has now outperformed Value by 16.2% over the last year, following a further 0.6 percentage point differential for the month, though the Momentum style remains best performed.
Among factor indices, Momentum gained 7%, while Enhanced Value and Low Volatility lagged.
Commodities and currencies
The CRB Commodity Index closed at 304.95 on January 31, climbing 3.15% over the month.
Commodities generally maintained their upward trajectory, notes Morgan Stanley, ending January higher in Australian dollar terms, with notable gains for precious metals and gold, with the latter surging by 7%.
The US dollar Index (DXY), a measure of the value of the US dollar relative to a basket of foreign currencies, rose by 0.7% to 108.37 by the end of the month.
The Australian dollar fell by -0.5% in January to US$0.6226 and has fallen by around -5% in the last few months.
Australian Banks
The average major bank total shareholder return of 6.2% in January beat the 4.6% gain for the ASX200.
Among the majors, National Australia Bank ((NAB)) was the best performer with an 8.2% gain, followed by ANZ Bank ((ANZ)), CommBank ((CBA)) and Westpac ((WBC)), with gains of 7.3%, 4.8% and 4.4%, respectively.
At the smaller end, Judo Capital ((JDO)) gained 11%, followed by Bank of Queensland ((BOQ)) and Bendigo & Adelaide Bank ((BEN)) with respective gains of 4.0% and 3.8%.
Stock market sentiment and the outlook
Macquarie notes stock market bullishness has eased since the euphoria following Trump’s election victory last November, as evidenced by a decline in the broker’s proprietary FOMO meter, designed to measure market sentiment.
Based on historical lags to bond yields, this broker suggests investors wait until April to add more risk to portfolios, at a time when surprises generated by the Trump administration may have levelled off. It’s thought sentiment can cool further, as Trump’s policies and the tightening of financial conditions caused by the recent spike in bond yields drive more negative economic surprises.
Talking of lags, Macquarie also highlights defensive sectors like Health, Staples and Gold usually outperform in the year following the first RBA rate cut.
See below for a summary of the market uncertainty created (post month-end) by US tariffs, and the potential positive and negative impacts on a range of ASX-listed companies.
ASX100 Best and Worst Performers of the month (in %)
Company | Change | Company | Change |
---|---|---|---|
TLX – TELIX PHARMACEUTICALS LIMITED | 19.22 | ILU – ILUKA RESOURCES LIMITED | -12.48 |
EVN – EVOLUTION MINING LIMITED | 18.50 | TWE – TREASURY WINE ESTATES LIMITED | -4.68 |
PDN – PALADIN ENERGY LIMITED | 17.99 | ORG – ORIGIN ENERGY LIMITED | -4.13 |
NEM – NEWMONT CORPORATION REGISTERED | 16.22 | ORA – ORORA LIMITED | -3.66 |
HUB – HUB24 LIMITED | 15.88 | ASX – ASX LIMITED | -2.46 |
ASX200 Best and Worst Performers of the month (in %)
Company | Change | Company | Change |
---|---|---|---|
BOE – BOSS ENERGY LIMITED | 36.21 | SGR – STAR ENTERTAINMENT GROUP LIMITED | -36.84 |
EMR – EMERALD RESOURCES NL | 33.23 | PMV – PREMIER INVESTMENTS LIMITED | -25.68 |
GMD – GENESIS MINERALS LIMITED | 29.15 | ZIP – ZIP CO LIMITED | -17.57 |
LTR – LIONTOWN RESOURCES LIMITED | 27.36 | CRN – CORONADO GLOBAL RESOURCES INC | -14.29 |
INA – INGENIA COMMUNITIES GROUP | 25.55 | ILU – ILUKA RESOURCES LIMITED | -12.48 |
ASX300 Best and Worst Performers of the month (in %)
Company | Change | Company | Change |
---|---|---|---|
OPT – OPTHEA LIMITED | 40.74 | WBT – WEEBIT NANO LIMITED | -36.94 |
BOE – BOSS ENERGY LIMITED | 36.21 | SGR – STAR ENTERTAINMENT GROUP LIMITED | -36.84 |
EMR – EMERALD RESOURCES NL | 33.23 | NXL – NUIX LIMITED | -28.96 |
GMD – GENESIS MINERALS LIMITED | 29.15 | NVX – NOVONIX LIMITED | -25.68 |
LTR – LIONTOWN RESOURCES LIMITED | 27.36 | PMV – PREMIER INVESTMENTS LIMITED | -25.68 |
ALL-TECH Best and Worst Performers of the month (in %)
Company | Change | Company | Change |
---|---|---|---|
PPS – PRAEMIUM LIMITED | 20.27 | WBT – WEEBIT NANO LIMITED | -36.94 |
MP1 – MEGAPORT LIMITED | 15.60 | 4DS – 4DS MEMORY LIMITED | -34.00 |
4DX – 4DMEDICAL LIMITED | 13.54 | NXL – NUIX LIMITED | -28.96 |
CAR – CAR GROUP LIMITED | 12.60 | NVX – NOVONIX LIMITED | -25.68 |
360 – LIFE360 INC | 12.20 | BRN – BRAINCHIP HOLDINGS LIMITED | -16.67 |
All index data are ex dividends. Commodities are in USD.
Australia & NZ
Index | 31 Jan 2025 | Month Of Jan | Quarter To Date (Jan-Mar) | Year To Date (2025) |
---|---|---|---|---|
NZ50 | 12995.010 | -0.88% | -0.88% | -0.88% |
All Ordinaries | 8789.70 | 4.38% | 4.38% | 4.38% |
S&P ASX 200 | 8532.30 | 4.57% | 4.57% | 4.57% |
S&P ASX 300 | 8460.40 | 4.46% | 4.46% | 4.46% |
Communication Services | 1666.90 | 2.43% | 2.43% | 2.43% |
Consumer Discretionary | 4190.00 | 7.13% | 7.13% | 7.13% |
Consumer Staples | 11850.00 | 0.69% | 0.69% | 0.69% |
Energy | 8881.10 | 3.00% | 3.00% | 3.00% |
Financials | 9141.50 | 6.12% | 6.12% | 6.12% |
Health Care | 46321.90 | 3.20% | 3.20% | 3.20% |
Industrials | 7905.00 | 3.38% | 3.38% | 3.38% |
Info Technology | 2854.80 | 4.16% | 4.16% | 4.16% |
Materials | 16773.20 | 4.02% | 4.02% | 4.02% |
Real Estate | 3937.10 | 4.67% | 4.67% | 4.67% |
Utilities | 8816.20 | -2.40% | -2.40% | -2.40% |
A-REITs | 1798.40 | 4.66% | 4.66% | 4.66% |
All Technology Index | 3983.90 | 4.69% | 4.69% | 4.69% |
Banks | 3813.30 | 5.74% | 5.74% | 5.74% |
Gold Index | 9703.00 | 15.19% | 15.19% | 15.19% |
Metals & Mining | 5442.60 | 3.56% | 3.56% | 3.56% |
The World
Index | 31 Jan 2025 | Month Of Jan | Quarter To Date (Jan-Mar) | Year To Date (2025) |
---|---|---|---|---|
FTSE100 | 8673.96 | 6.13% | 6.13% | 6.13% |
DAX30 | 21732.05 | 9.16% | 9.16% | 9.16% |
Hang Seng | 20225.11 | 0.82% | 0.82% | 0.82% |
Nikkei 225 | 39572.49 | -0.81% | -0.81% | -0.81% |
DJIA | 44544.66 | 4.70% | 4.70% | 4.70% |
S&P500 | 6040.53 | 2.70% | 2.70% | 2.70% |
Nasdaq Comp | 19627.44 | 1.64% | 1.64% | 1.64% |
Metals & Minerals
Index | 31 Jan 2025 | Month Of Jan | Quarter To Date (Jan-Mar) | Year To Date (2025) |
---|---|---|---|---|
Gold (oz) | 2847.29 | 8.40% | 8.40% | 8.40% |
Silver (oz) | 32.61 | 7.90% | 7.90% | 7.90% |
Copper (lb) | 4.3085 | 5.18% | 5.18% | 5.18% |
Aluminium (lb) | 1.1780 | 3.05% | 3.05% | 3.05% |
Nickel (lb) | 6.8524 | -4.09% | -4.09% | -4.09% |
Zinc (lb) | 1.2550 | -7.13% | -7.13% | -7.13% |
Uranium (lb) weekly | 71.15 | -1.18% | -1.18% | -1.18% |
Iron Ore (t) | 101.33 | -2.42% | -2.42% | -2.42% |
Energy
Index | 31 Jan 2025 | Month Of Jan | Quarter To Date (Jan-Mar) | Year To Date (2025) |
---|---|---|---|---|
West Texas Crude | 73.05 | 5.14% | 5.14% | 5.14% |
Brent Crude | 76.00 | 4.74% | 4.74% | 4.74% |
Tariffs
Triggering a flight for safety across the world’s financial markets, President Trump on February 1 signed executive orders imposing additional tariffs on imports from Canada, Mexico, and China.
Specifically, a 25% tariff was levied on most goods from Canada and Mexico, with a reduced 10% tariff on Canadian energy resources. Imports from China were subjected to a 10% tariff.
These measures, effective February 4, were justified by the administration as efforts to address illegal immigration and drug trafficking concerns.
In retaliation, China announced tariffs on US goods, including a 15% tax on coal and liquefied natural gas, and a 10% tax on crude oil, large-displacement vehicles, and agricultural machinery, effective February 10.
China also initiated an antitrust investigation into Google.
Canada and Mexico responded by negotiating temporary pauses in tariff implementation. Canadian Prime Minister Justin Trudeau secured a 30-day delay by pledging enhanced border security measures to combat fentanyl smuggling.
Similarly, Mexican President Claudia Sheinbaum agreed to deploy 10,000 troops to the U.S.-Mexico border, resulting in a temporary suspension of tariffs on Mexican goods.
Macquarie believes Treasury Wine Estates ((TWE)) and WiseTech Global ((WTC)) may benefit from the imposition of new tariffs.
The list of companies potentially negatively impacted is longer and includes Aristocrat Leisure ((ALL)), Brambles ((BXB)), CAR Group ((CAR)), Fisher & Paykel Healthcare ((FPH)), Light & Wonder ((LNW)), Nufarm ((NUF)), Orora ((ORA)), Reece ((REH)), Rio Tinto ((RIO)), and Reliance Worldwide ((RWC)).
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CHARTS
For more info SHARE ANALYSIS: ALL - ARISTOCRAT LEISURE LIMITED
For more info SHARE ANALYSIS: ANZ - ANZ GROUP HOLDINGS LIMITED
For more info SHARE ANALYSIS: BEN - BENDIGO & ADELAIDE BANK LIMITED
For more info SHARE ANALYSIS: BOQ - BANK OF QUEENSLAND LIMITED
For more info SHARE ANALYSIS: BXB - BRAMBLES LIMITED
For more info SHARE ANALYSIS: CAR - CAR GROUP LIMITED
For more info SHARE ANALYSIS: CBA - COMMONWEALTH BANK OF AUSTRALIA
For more info SHARE ANALYSIS: EVN - EVOLUTION MINING LIMITED
For more info SHARE ANALYSIS: FPH - FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
For more info SHARE ANALYSIS: JDO - JUDO CAPITAL HOLDINGS LIMITED
For more info SHARE ANALYSIS: LNW - LIGHT & WONDER INC
For more info SHARE ANALYSIS: NAB - NATIONAL AUSTRALIA BANK LIMITED
For more info SHARE ANALYSIS: NEM - NEWMONT CORPORATION REGISTERED
For more info SHARE ANALYSIS: NST - NORTHERN STAR RESOURCES LIMITED
For more info SHARE ANALYSIS: NUF - NUFARM LIMITED
For more info SHARE ANALYSIS: ORA - ORORA LIMITED
For more info SHARE ANALYSIS: REH - REECE LIMITED
For more info SHARE ANALYSIS: RIO - RIO TINTO LIMITED
For more info SHARE ANALYSIS: RWC - RELIANCE WORLDWIDE CORP. LIMITED
For more info SHARE ANALYSIS: TWE - TREASURY WINE ESTATES LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION
For more info SHARE ANALYSIS: WTC - WISETECH GLOBAL LIMITED