Australian share market edges higher as Donald Trump’s administration inks first tariff deal with UK

Australian shares are edging higher after White House officials inked their first tariff deal, seeding hopes tensions could de-escalate between China and the US.

The S&P/ASX200 rose 33.7 points, or 0.41 per cent, to 8,225.4, as the broader All Ordinaries gained 33.5 points, or 0.4 per cent, to 8,451.6.

The tariff agreement between the UK and US helped push Wall Street higher overnight, with the Dow Jones and S&P500 both lifting more than 0.5 per cent, while the tech-heavy Nasdaq rallied 1.07 per cent.

Britain’s average duties on US products will fall to 1.8 per cent from 5.1 per cent, but a 10 per cent tariff on US-bound goods will remain, excepting a certain quota of UK steel.

“While (it’s) a good start, the trade deal that really matters for Australia is the one between the US and China, with talks set to start this weekend in Switzerland,” IG Markets analyst Tony Sycamore said.

“It would be a net positive if US-China trade tensions were to ease, but it is unlikely that any deal will see US tariffs on Chinese imports fall much below 50 per cent at this point of time.”

Seven of 11 local sectors were trading higher by lunchtime, led by a 1.8 per cent IT stock rally on the back of an overnight surge in US tech stocks.

Recent Nasdaq-100 company earnings were up more than 22 per cent year-on-year, outshining S&P500 earnings, which grew 12.3 per cent.

Local data centre NEXTDC was up more than three per cent on Friday, and has surged more than 44 per cent since April 7.

Financials were lifting the bourse higher, up 1.1 per cent with ANZ the only big four bank in the red a day after its mixed results announcement.

Investment and financial services giant Macquarie rallied 4.4 per cent to $204.45, after posting a better-than-expected $3.7 billion profit in the year to April.

Energy stocks jumped 1.2 per cent, with Woodside and Santos both up roughly two per cent, as oil prices pushed higher.

Brent crude futures were up three per cent since Thursday morning to trade at $US62.70 a barrel as the US sanctioned two China oil refiners for using Iranian oil.

Materials were under pressure, down 0.8 per cent, with iron ore giants BHP and Rio Tinto down 1.1 per cent and 0.7 per cent as investor caution weighed ahead of US-China trade talks.

Gold miners were trading lower as the precious metal eased below $US3300 an ounce, the safe haven taking a breather for now.

Conversely, investors’ risk-on appetite was on-show as Bitcoin broke above US$100,000 ($157,000) for the first time since January to trade at $US103,070.

The Australian dollar is buying 63.87 US cents, down from 64.10 US cents as the greenback lifted on the US-UK tariff agreement and hopes of calmer waters on the US trade front.