ASX 200 Dips 0.6% this Week Despite Friday's Rebound

The S&P/ASX 200 rose 64 points, or 0.7%, to end at 8,730 on Friday, halting losses in the prior eight sessions and recovering from a three-week low. Bargain hunting on the first trading day of May supported broad gains across sectors. Sentiment was also lifted by stronger factory activity in China, Australia’s top trading partner, and an upward revision to April’s manufacturing PMI in Australia. U.S. stock futures also strengthened after record closes on the S&P 500 and Nasdaq on Thursday, due to robust Q1 earnings and easing Middle East tensions. Mining majors led the upturn, with solid gains from BHP Group (2.3%), Rio Tinto (2.9%), and Fortescue (1.5%). In contrast, the four major banks slipped, with ANZ down by 2.7% after raising its coverage ratio by 4bps to account for mounting geopolitical risks. For the week, markets fell 0.7%, marking the third straight period of weakness, pressured by a possible 25bps rate hike from the Reserve Bank next week as inflation costs linger.

Australian equities rose 62 points, or 0.7%, to 8,727 in early deals on Friday, the first trading day of May, snapping an eight-session losing streak and bouncing back from a three-week low. Bargain hunting drove broad-based gains, with non-energy minerals and industrial services leading. An upward revision in April manufacturing PMI also lifted investor sentiment despite weaker output and soft underlying demand at home and abroad. Meanwhile, U.S. stock futures strengthened following record-high closes on Wall Street's S&P 500 and Nasdaq Thursday, amid strong earnings from Apple and Caterpillar, even as economic data weakened and geopolitical risks linger. Lynas Rare Earths jumped 3.1%, followed by BHP Group (2.8%), Evolution Mining (2.2%), and Fortescue (1.4%). However, markets are tracking a third straight weekly drop, down about 0.7% so far, as persistent inflation pressures weigh. Concerns also linger that the Reserve Bank may raise cash rates further when officials meet next week.

The S&P/ASX 200 fell 21 points or 0.2% to close at 8,666 on Thursday, the final trading day of April, marking its eighth straight decline and holding at a three-week low. Caution prevailed as markets braced for a possible 25bps rate hike from the Reserve Bank of Australia next week, following moves in February and March, with rates seen rising to 4.60% by September, the level last reached in 2011, amid persistent cost pressures. Inflation accelerated to 4.6% in March from 3.7%, staying above the RBA's 2–3% target. In the U.S., a divided Fed held rates steady on Wednesday amid a looming leadership change. Woolworths slumped 7.8%, dragging consumer staples after warning fiscal 2026 food earnings would miss the upper range amid fuel costs. Miners shed 2.7% as base metals weakened, with BHP, Rio Tinto, and Fortescue down between 2.0% to 2.8%. Against the ongoing decline, local markets advanced 2.2% for the month, reversing a slump of nearly 8% in March, supported by strong bargain hunting.