Australian Shares Extend Rally to New Record

The ASX 200 added 0.2% to end at 8,680 on Monday, snapping prior losses as utilities, industrials, and healthcare lifted sentiment. Sentiment improved after the government said the 2025/26 budget deficit came in about $6 billion narrower than forecast, driven by stronger investment and income. In China, industrial profits in the Jan-August period rose solidly, though growth slowed amid uneven activity. However, gains were capped by a sharp drop in U.S. stock futures as oil prices climbed after President Trump rejected Iran’s ceasefire terms, while Treasury yields hovered at multi-year highs on the prospect of further Fed tightening. Locally, the Reserve Bank is set to raise cash rates for the fourth time this year to curb inflation. Northern Star Resources jumped 6.2% after rejecting a $38 billion takeover bid from Gold Fields. CSL climbed 2.8%, while the big four banks rose between 0.5% and 1.6%. Losers included Genesis Minerals (-5.8%), Lynas Rare Earths (-3.2%), and Nextdc (-2.7%).

Australian shares edged up 0.2% to 8,676 in early Monday trading, trying to claw back losses from the prior session as utilities, industrials, and financials provided support. Investor sentiment, however, remained fragile, with U.S. equity futures under pressure after oil prices climbed following President Donald Trump’s rejection of an Iranian peace proposal aimed at ending the Middle East conflict and reopening the Strait of Hormuz. Locally, traders braced for the Reserve Bank’s policy decision Tuesday, with expectations leaning toward further tightening after three hikes earlier this year as inflation remains sticky. In main trading partner China, January–August industrial profit figures are due today, with PMI surveys to follow in coming days. The four major banks rose between 0.1% and 0.7%. Northern Star Resources surged 8.6%, and Evolution Mining added 1%, while laggards included Technology One (-1.8%), Insurance Australia (-1.5%), HUB24 (-1.2%), and Lynas Rare Earths (-0.8%).

Australia’s ASX 200 lost 37 points, or 0.4%, to end at 8,665 on Friday, marking a second session of losses as caution grew ahead of next week’s Reserve Bank policy decision. Sticky inflation has fueled expectations of further rate hikes following three moves earlier this year, while August inflation data is also due after July’s reading exceeded forecasts and remained above the central bank’s 2–3% target band. Separately, August labor data showed mixed signals, with the jobless rate rising to a near five-year high of 4.6%, while employment rose more than expected. In the U.S., a summit between President Trump and Chinese leader Xi Jinping failed to produce breakthroughs on key geopolitical issues, despite an extension of their trade truce. Most sectors slid, led by tech, consumer services, and logistics. Mineral Resources (-4.8%), PLS Group (-3.7%), REA Group (-3.2%), and Xero (-2.8%) posted heavy losses. For the week, the index fell 0.8%, marking its fourth straight weekly decline.