Australian Equities Retreat as Ceasefire Rally Fades

The ASX 200 edged up 21 points, or 0.2%, to close at 8,973 on Thursday, reversing morning weakness and notching a third consecutive gain. Traders largely brushed aside a modest dip in U.S. futures while weighing whether the fragile ceasefire between the U.S. and Iran would hold. Attention turned to upcoming U.S. personal spending and PCE deflator data. Investors also await CPI and PPI reports in top trading partner China, due Friday. Energy minerals, financials, and utilities were mainly higher, offsetting steep losses in tech services, healthcare, and consumer stocks. Bendigo and Adelaide Bank surged 8.7% after delivering solid Q3 results and unveiling two outsourcing partnerships aimed at reshaping costs and technology over seven years. The rally underscored confidence in its agenda to narrow profitability gaps with the major lenders. The “big four” banks rose between 1.1% and 2.2%, while Woodside Energy (4.0%), Ampol (3.5%), and Santos (2.5%) were other notable movers.

Australian shares fell 32 points, or 0.4%, to 8,920 in early Thursday trade, reversing solid gains from the previous two sessions as traders engaged in profit-taking after the market climbed to a four-week high amid optimism over a two-week ceasefire between the U.S. and Iran. Caution also grew ahead of CPI and PPI data in top trading partner China, set to be due Friday. Locally, worries emerged that living standards in Australia may slide in the near term amid cost pressures, while economists warned that Canberra could see the weakest GDP growth since the early 1990s if the war in the Middle East drags on. Commercial services, non-energy minerals, and consumer durables weighed on sentiment, but gains in energy minerals, communication, and utilities helped limit the declines. Ramelius Resources slipped 4.4% as it may downgrade guidance for FY 2026. Other notable laggards included Xero Ltd. (-5.2%), Evolution Mining (-3.3%), Pro Medicus (-2.4%) and BHP Group (-1.4%).

The ASX 200 soared 228 points or 2.6% to end at 8,957 on Wednesday, hovering at its highest level in four weeks and extending solid gains for the second session. A strong rally in U.S. stock futures buoyed sentiment after Washington and Tehran agreed to a two-week ceasefire. Prime Minister Anthony Albanese welcomed the development, but noted that Trump's rhetoric was worrying. In New Zealand, the Reserve Bank held its official cash rates steady at 2.25% for the second straight meeting, in line with estimates, as policymakers closely monitored the impact of the Middle East conflict and signaled their readiness to act decisively if cost pressures intensify. All major sectors in Australian markets except energy rose sharply. The "big four" banks jumped between 2.8% and 4%, while big miners such as Fortescue, BHP, and Rio Tinto rose between 2% and 4%. Energy stocks fell as the ceasefire triggered a sharp drop in oil prices, with Woodside Energy tumbling 11%, and Santos slipping 4.6%.