Investors are expecting an uptick in earnings growth at the country’s biggest miners, which they say will justify the ASX’s near-record levels despite broader uncertainty brought on by the Trump administration’s tariff plans.
The S&P/ASX 200 is up almost 9 per cent over 12 months, despite little earnings growth. That has stretched valuations, and left expensive stocks open to a slump if economic indicators point towards weakness.
This week, the OECD published an economic outlook that business investment was 30 per cent weaker than what it should be in Australia. In the United States, President Donald Trump’s tariff regime could cut GDP growth from 2.8 per cent last year to 1.6 per cent this year.
But Morgan Stanley has kept its year-end target for the ASX 200 at 8500 points, which equity strategist Chris Nicol said reflected confidence that the resources sector would have an earnings revival within 18 months.
The local benchmark closed at 8515.7 points on Friday, down 23.2 points or 0.3 per cent. It has remained largely unchanged over the week.
Source: https://www.afr.com/markets/equity-markets/investors-expect-rebound-in-mining-earnings-to-keep-asx-at-record-20250606-p5m5el