ASX Market Recap: ASX's 191-Point Dive as Oil Crumbles and Coles Climbs

Good Evening,

Welcome to Equity Espresso’s Daily Market Recap. The ASX took a harder tumble than the Prime Minister at a mining conference today, plunging into correction territory as tariff fears and energy selloffs left investors reaching for the handrails. Let’s jump in.

Local Market

A terrible day for the local market after a savage night on Wall Street and global equity markets, with the S&P/ASX index entering ‘correction’ territory, falling 191.9 pts (-2.44%) to 7,667.80, in the largest single-session percentage drop since May last year.

Global markets plunged after Trump’s tariff announcement raised fears of a global trade war if other countries retaliate, which could slash international trade and growth. In the U.S., more expensive goods could squeeze corporate profits as companies either absorb higher costs or pass them on to consumers. Rising consumer prices create the risk of stagflation—inflation with stagnant economic growth. The depth and breadth of the tariffs mean no one knows what’s in store for the economy; it might be overblown, and the U.S. economy might be better off in the long term. Markets don’t believe so and are selling off, taking the wait-and-see approach.

Amongst the sea of red were pockets of rising ASX companies. Consumer Staples (+2.42%) was again the sector leader for the second day running as Coles (+4.14%), Woolworths (+3.39%), and Endeavour Group (+3.09%) rose, with all three recording weekly gains in a tumultuous week.

Gold continues to be the best, albeit well-publicised trade, with spot commodity prices briefly rising back above US$3,110 and is set for its fifth consecutive weekly gain. It has run hot of late, so one to watch if it runs out of steam. Northern Star Resources (+2.19%) and Capricorn Metals (+5.22%) were the day’s best performers in the gold space.

“Defensive” stocks have proven their worth this week, with some of the largest ASX-listed companies rising. Check out our Stocks To Watch section later in the newsletter to see some of the winners for the week.

Energy (-8.00%) stocks got smashed, with oil prices plunging. West Texas Intermediate fell below $67 and Brent below $70, triggering the worst rout since 2022. The selloff was triggered by OPEC+'s plan to triple output increases by May. Woodside Energy (-9.12%), Santos (-9.44%) and Beach Energy (-10.75%) saw some of the heaviest selling.

One Positive? Markets are pricing in an 80% chance that the RBA will lower the cash rate to 3.85% when it next meets on May 19-20. Other economists lifted their expectations for rate cuts today, which you can read in our Broker Section of the newsletter.

Finally, in today’s Deep Dive, we look at the biopharmaceutical company Opthea, why it remains in a trading suspension and the risks of investing in Biotech companies.

ASX Indices

ASX Sector Performance

DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your own research before making any investment.