Index Update:  The S&P/ASX 200 closed up 2.50 points on Monday at 8,808.50, with Mesoblast Limited and Ampol Limited leading gains, rising 4.91% and 4.17%, respectively. The index has fallen 0.25% over the past five days and remains 4.29% below its 52-week high. Middle East tensions lifted oil prices, although investors remained focused on expectations for another year of moderate ASX returns. Sector performance was mixed, with five sectors higher and six lower. Telecommunications Services led gains, up 0.89%, while Information Technology was the weakest sector, falling 2.49%.

Macro Update: Iran and the United States released footage of missile launches as tensions escalated following fresh military actions. Iran's Islamic Revolutionary Guard Corps said it launched attacks against U.S. targets in response to alleged American aggression, while U.S. Central Command confirmed strikes on dozens of targets across Iran. Despite the escalation, U.S. President Donald Trump said Washington and Tehran had agreed to continue talks. Iranian Foreign Minister Abbas Araqchi and Omani officials also discussed measures to ensure safe passage for ships through the Strait of Hormuz.

Top Market Movers: The S&P/ASX 200's top gainers were Mesoblast Limited (ASX:MSB), which climbed AUD0.110, or 4.91%, to AUD2.350, followed by Ampol Limited (ASX:ALD), up AUD1.470, or 4.17%, to AUD36.750, and Genesis Minerals Limited (ASX:GMD), which gained AUD0.210, or 3.70%, to AUD5.880. Leading declines were Kingsgate Consolidated Limited (ASX:KCN), down AUD0.640, or 12.83%, to AUD4.350, Silex Systems Limited (ASX:SLX), which fell AUD0.450, or 7.90%, to AUD5.250, and ResMed Inc (ASX:RMD), down AUD1.460, or 4.86%, to AUD28.570.

Commodity Update:  The U.S. dollar strengthened against most major currencies on Monday after renewed tensions in the Middle East heightened inflation concerns and reinforced expectations that central banks could keep interest rates higher for longer. Gold declined 0.96% to USD 4,073.70 per ounce, silver fell 2.48% to USD 58.68 per ounce, and copper slipped 0.85% to USD 13,387.60 per tonne. Brent crude oil traded at USD 78.46 per barrel, down 3.30%, as markets assessed supply disruption risks after Iran announced the closure of the Strait of Hormuz.

Our Stance: The S&P/ASX 200 edged higher on Monday as gains in healthcare and energy stocks offset weakness in technology shares, while investors balanced geopolitical risks in the Middle East against a relatively stable domestic outlook. Escalating tensions between Iran and the United States briefly supported oil prices and renewed attention on inflation and interest rate expectations, although commodity markets showed mixed reactions as traders assessed the likelihood of supply disruptions. With the index still trading below its recent highs and consensus expectations centred on moderate returns, investors appear to be favouring selective opportunities over broad-based risk taking.

The S&P/ASX 200 advanced 2.50 points in the latest trading session, forming a bullish candlestick that reflects renewed buying interest. From a technical perspective, the index continues to trade comfortably above its 50-day Simple Moving Average (SMA), which is acting as a key dynamic support level and reinforcing the prevailing positive trend. Immediate support is positioned around 8,730.50, and holding above this level would help preserve the broader bullish structure while supporting further upside momentum. A sustained rebound from this support could lead to a retest of recent highs and potentially extend the ongoing rally. However, a decisive break below 8,730.50 would weaken the near-term technical outlook, trigger increased selling pressure, and raise the risk of a deeper corrective move.

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