ASX Set to Rise as Global Markets Stabilize; Trump Delays Tariff Decisions

The Australian stock market is anticipated to open higher, buoyed by stabilization in global markets. Futures indicated an increase of 13 points, or 0.2 percent, at the market's opening on January 21, 2025. This positive outlook comes after European stocks experienced a rebound, erasing earlier losses. Automakers emerged as key performers, spurred by speculation that US President-elect Donald Trump will not impose new tariffs on his first day in office.

European Markets Perform Well

The Stoxx Europe 600 Index ended the day slightly up, by less than 0.1 percent, after initially dipping by 0.2 percent. Notably, the index is currently about 1 percent shy of its recorded high from September. Major car manufacturers such as Daimler Truck Holding AG and BMW AG both saw their stock prices increase by more than 2 percent.

Concerns of Tariffs Eased

The trading day unfolded with a backdrop of Wall Street being closed for a holiday. Traders reacted positively when it was reported that Trump will refrain from imposing tariffs on countries like China, Canada, and Mexico immediately. This update helped ease fears of rising inflation and hindered global growth due to potential trade wars.

Furthermore, futures for the S&P 500 and Nasdaq also recorded gains, and the US dollar saw a slight depreciation. A report indicated that the new administration intends to revisit existing trade policies rather than announce new tariffs, contributing to the positive momentum in equity markets.

Market Specifics and Reactions

In individual stock news, shares of Telefónica SA fell by about 3 percent after the Spanish government's sudden decision to replace the telecom firm's long-standing executive chairman and CEO. On the other hand, shares of Belimo Holding AG increased following the company's promising sales figures, which exceeded analysts' predictions.

As markets anticipate the upcoming annual meeting of global leaders in Davos, Switzerland, earnings reports from various companies will also be under scrutiny. This combination of earnings data and significant political developments is expected to play a critical role in shaping market sentiment in the near future.

ASX, Markets, Trump