Index Update: The S&P/ASX 200 closed lower on Friday, declining 9.40 points or 0.11% to 8,516.30. Despite the dip, the index posted a weekly gain of 1.04%, although it remains down 2.27% year to date. Market sentiment showed signs of stabilisation, with Australian equities snapping a three-week losing streak. Investors continued to assess evolving signals around a potential Middle East peace deal, as the conflict entered its fifth week.

Sector performance was mixed, with 7 of the 11 sectors finishing in negative territory alongside the broader index. Information technology led decliners, falling 1.53%, while A-REITs dropped 0.91% and industrials slipped 0.41%. Consumer discretionary and financials also edged lower.

On the positive side, energy emerged as the top performer, gaining 0.88% on the day and 0.86% over the past five sessions. Utilities rose 0.36%, while consumer staples and materials posted modest gains. Overall, the session reflected a divided market, where strength in defensive and energy-linked sectors was offset by weakness in growth-oriented segments such as technology.

Macro Update: The global economy is facing renewed uncertainty as the Middle East conflict drives inflationary pressures and disrupts energy markets, according to the OECD’s Interim Economic Outlook. Global growth, which entered 2026 on stable footing, is now projected at 2.9% in 2026 and 3.0% in 2027. Elevated energy prices could further weigh on growth if disruptions persist. The US economy is forecast to grow 2.0% in 2026, while the euro area and China are expected to see slower expansion. Inflation across G20 nations is projected at 4.0% in 2026 before easing to 2.7% in 2027.

Top Market Movers: On Friday, Treasury Wine Estates (ASX:TWE) led gains, rising AUD0.250 or 7.418% to AUD3.620, followed by Telix Pharmaceuticals (ASX:TLX), up AUD0.730 or 5.650% to AUD13.650. Washington H. Soul Pattinson (ASX:SOL) gained AUD1.920 or 5.007% to AUD40.260. On the downside, DroneShield (ASX:DRO) dropped AUD0.600 or 13.393% to AUD3.880, NextDC (ASX:NXT) fell AUD0.980 or 7.891% to AUD11.440, while Predictive Discovery (ASX:PDI) declined AUD0.045 or 6.082% to AUD0.695.

Commodity Update: The U.S. dollar strengthened toward multi-month highs on Friday as investors sought safe-haven assets amid escalating Middle East tensions and uncertainty over diplomatic progress between the United States and Iran. Gold rose 1.00% to USD 4,451.82, silver gained 0.95% to USD 68.578, and copper increased 0.80% to USD 12,232.63. Meanwhile, Brent crude slipped 1.00% to USD 100.83, reflecting easing geopolitical risk premiums and cautious optimism over negotiations.

Our Stance: Market conditions reflect a cautiously stabilising environment, supported by improving sentiment and resilience in defensive sectors. However, persistent geopolitical risks, elevated inflation, and uneven sector performance continue to limit upside momentum. Near-term market direction is likely to remain sensitive to macroeconomic developments, particularly energy price movements and global growth signals. While selective opportunities may emerge in energy and defensive segments, broader market performance could remain range-bound amid ongoing uncertainty and shifting investor risk appetite.

In its latest session, the S&P/ASX 200 edged lower by 9.40 points, forming a small bearish candlestick and reflecting mild selling pressure. Despite this pullback, the broader technical structure remains cautious, as the index continues to trade below its 50-period Simple Moving Average (SMA), which is acting as a key resistance and capping upside momentum. Unless the index reclaims and sustains above this level, bullish prospects may remain limited in the near term. On the downside, immediate support is placed near 8,430.50, a crucial level that must hold to stabilise sentiment and avoid a deeper corrective phase.