We review April’s market moves and its key drivers. With the XJO representing the top 200 ASX-listed stocks and forming the basis for many passive ETFs, we delve into the movements within this index. Additionally, as the XJO is the most actively traded options series, we examine market positioning as we head into November.
Key Drivers
In April 2025, the ASX 200 rose 3.61% despite significant volatility, driven by:
- US-China Trade Tensions: US tariffs announced on April 2 caused a 3.6% drop in the ASX 200, but a 90-day trade negotiation period spurred a 13.3% recovery from the month’s low. Gold exports, exempt from tariffs, boosted gold miners.
- Sector Performance:
- Gold Miners: Gained as gold prices hit $3,000/oz due to safe-haven demand.
- ·Energy & Mining: Declined due to fears of lower global demand, with energy down 4% by early May.
- Health Tech: Fell, with CSL dropping 6% after tariff exemption threats.
- Technology: Rose late in April, lifted by strong US tech earnings
- Monetary Policy: Expectations of a May 2025 RBA rate cut grew amid 4.0% unemployment and 3.2% inflation, supporting market recovery.
- China’s Economy: A contracting PMI of 49 pressured resource stocks, though stimulus hopes offered some optimism.
- Domestic Factors: The May 2025 federal election and fiscal policy concerns, alongside low consumer confidence, added uncertainty, with S&P warning of credit rating risks.
Overall Market Moves
Global markets experienced heightened volatility in April, triggered by U.S. President Trump’s surprise tariff announcement on April 2 – dubbed “Liberation Day.” The sweeping 10% import tax and higher duties on select countries sparked sharp selloffs, sending the S&P 500 into bear market territory and rattling markets across Europe and Asia. Economic fallout followed quickly, with U.S. GDP contracting 0.3% in Q1 and the IMF cutting its 2025 global growth forecast to 2.8%. The uncertainty drove investors toward safe havens like gold and government bonds, while sectors such as technology, manufacturing, and healthcare were particularly hard hit.
Oil prices slumped to four-year lows on recession fears, while merger and acquisition activity slowed to levels not seen since 2009. Though markets began stabilizing late in the month, sentiment remained fragile, with attention turning to central bank policy signals and potential trade negotiations. The overall outlook remains cautious as investors brace for further economic and geopolitical shocks.
Moves in the XJO
The Commonwealth Bank contributed the 80 pts to the index with a massive 10% gain for the month. Woodside took 13 points from the index with the decline in oil over this time.
Table 1. Key index points contributors to the XJO
Sector Moves
At a sector level, Information technology and financials were the best performers with energy being materially lower because of the fall in Oil.
Figure 2. Sector moves for the month of April.
Table 2. Option position summary of the five largest traded options series at the end of April (Source: ASX)
NOTE: Option Volumes in the above table are single-sided (i.e. on a per contract basis) excluding Market Makers
1. Total Volume including volume executed by Market Makers 2 Derivatives Liquidity Ratio (DLR) = options volume (in shares) / volume of underlying security
2. Put/Call Ratio: total volume of Puts excluding Market Makers / total volume of Calls
3. The net calls & net puts are the number of options contracts bought minus the number of options contracts sold, excluding Market Makers
Options Moves
At the end of the month, the XJO continues to have the largest open interest with a high net number of puts and At the end of the month, the XJO continues to have the largest open interest with a high net number of puts as investors moved to protect their portfolios and hedge against the trump uncertainty.
BHP has a high number of sold calls possibly indicating that investors were using the high volatility and associated higher options pricing to collect additional premium and income.
STO showed a similar trend although the higher number of sold puts indicate that some investors may have been using the sell off in the stock as an opportunity to acquire more or they were expecting a bounce and sold puts for income.
With the CBA nudging record highs it’s not surprising that there is a higher number of sold calls as investors look for additional income.
FMGs options point towards investors hedging against a further fall in the stock with a higher number of bought puts and sold calls.
Popular trades for the month:
Buying XJO put spreads for risk management.
With the uncertainty predicted and created by “liberation day” a number of investors bought put spreads in the index to offset any fall in the market. These investors took profits on the first morning of the falls and reopened the trade in the afternoon for three consecutive days with profits going along way to offsetting the fall in the valuation of their portfolio. (see more information on put spreads on our blog). With the market now recovering these investors are now looking for opportunities to sell covered calls.
Moves Ahead
For the remainder of May 2025, the market faces several key market risks and anticipates significant data releases that could influence investor sentiment. Major banks, including Commonwealth Bank (CBA), National Australia Bank (NAB), and ANZ, are scheduled to report earnings, with analysts expressing concerns over potential margin pressures and subdued credit growth. Additionally, the Reserve Bank of Australia’s (RBA) upcoming interest rate decision on May 20 is highly anticipated, especially after recent inflation data suggested a potential rate cut. Global factors, such as the ongoing U.S. tariff policies, continue to pose risks, particularly for Australian companies with significant exposure to international markets.
Further Information
Our specialised team of advisors provide guidance for all levels of investors, tailoring your experience to help meet your investment needs.
As our client, iInvest Trading & Advisory will provide you with daily research, economic updates, and trading ideas.
We have offices in Burleigh Heads QLD and Beechworth Vic. To make an appointment to speak to one of our advisors please call. 07 55208788
DISCLAIMER: This Market update has been prepared by the Trading Desk and is not intended to be a research report. We believe this information is correct at the time of its compilation however no warranty is made as to its accuracy, reliability, or completeness. We cannot guarantee the performance or return on investments and those acting on this information do so at their own risk. The information is of a general nature, for the recipient’s information only and has been prepared without considering any particular individual’s investment objectives, financial situation or particular needs (“relevant circumstances”). Before acting on this information, you should carefully consider the appropriateness of it having regard to your own relevant circumstances and if you require advice regarding any aspect of the information and statements of opinion set out in this document, particularly as to whether you should base an investment decision upon it, please contact your financial adviser
DISTRIBUTION: The material contained in this communication is prepared for the exclusive use of clients of iInvest Trading & Advisory Pty Ltd (“iInvest Trading & Advisory”). iInvest Trading & Advisory is a Corporate Authorised Representative (No. 431611) of Zodiac Securities Pty Ltd (AFSL No. 398350). The information contained herein is confidential and may be legally privileged. If you are not the intended recipient, confidentiality is not lost nor privilege waived by your receipt of it. Please delete and destroy all copies. You should not use, copy, disclose or distribute this information without the express written authority of iInvest.
DISCLOSURE: iInvest Trading & Advisory, its related companies, officers, employees, and agents (“iInvest”) may have a relevant interest in some of the securities mentioned but those holdings are not material unless disclosed in this communication. These holdings (or absence of holdings) may change at any time after publication of this communication, without notice. iInvest may earn income, fees, brokerage or commissions or other benefits because of recommendations, dealing or transactions in the securities mentioned in this communication. These interests do not influence iInvest in providing the general advice contained in this communication. iInvest may trade in financial products which is contrary to the recommendations given in this communication. Nothing in this communication shall be construed as a solicitation to buy or sell a financial product, or to engage in or refrain from engaging in any transaction. We cannot guarantee that the integrity of this communication has been maintained, is free from errors, omissions, misstatements, virus interception or interference.1
Copyright © 2024 iInvest Trading & Advisory. All Rights Reserved.
You are receiving this email as a valued customer of iInvest Trading & Advisory
