The Australian share market has rebounded after United States President Donald Trump announced a temporary lowering of tariffs on many countries, sending equities surging overnight.
The S&P/ASX200 has rallied 347.2 points, or 4.71 per cent, to 7,723, as the All Ordinaries shot up 359.7 points, or 4.76 per cent, to 7,921.4.
The bounce came after a Wall Street rally in the US overnight, with the S&P500 surging 9.5 per cent higher, its best daily result since the global financial crisis in 2008, as the tech-heavy Nasdaq jumped 12.2 per cent.
Meanwhile, Japan’s Nikkei surged 8 per cent, and European futures shot up.
Overnight, Trump that were detailed during an last week.
However, a 10 per cent blanket duty on almost all US imports will remain in effect. Australia has not received a lowered tariff thanks to the temporary pause, as it was already set to have a 10 per cent tariff applied.
The U-turn is believed to be a response to dislocation in bond markets as yields surged and confidence in US treasuries began to falter.
The US excluded China from the break and instead increased tariffs on Chinese goods to 125 per cent, after China lifted its impost on US goods to 84 per cent from 34 per cent hours earlier.
Australian equities soar
All 11 local sectors were trading higher, led by a 6.8 per cent rally in IT stocks, as materials surged 6.3 per cent and energy stocks jumped 5.8 per cent.
The Australian dollar has rallied almost 3 per cent against its US counterpart to buy 61.36 US cents, after struggling to break above US$0.60 for most of the week.
What are analysts saying about the rebound?
Jessica Amir, market analyst for trading firm Moomoo, said: “Just like that, US President Donald Trump paused higher tariffs on most countries for 90 days and investors jumped back into stocks, gold and oil, selling out of bonds.”
Tony Sycamore, analyst for trading platform IG Markets, said while Trump appeared willing to look through equity market losses, the overnight backflip showed “the bond market remains the ultimate master of markets and politicians alike by virtue of its role as the ‘plumbing’ of the financial system”.
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