Index Update: Australia’s S&P/ASX 200 edged up 8.70 points, or 0.10%, to close at 8,749.90 on Monday. The benchmark has still declined 2.90% over the past five days and remains virtually unchanged year to date. Seven of the 11 sectors finished higher alongside the broader index. Health Care led the market with a 1.52% gain, rebounding from its recent decline, although the sector remains 1.51% lower over the past five days. Consumer Staples advanced 0.61%, Financials gained 0.43%, Energy rose 0.38%, and Utilities added 0.33%. On the weaker side, Information Technology fell 1.14%, Materials declined 0.55%, and Industrials slipped 0.35%.

Macro Update: Global market attention remained centred on energy prices, geopolitical tensions and the interest-rate outlook. Expectations that Monetary Policy could remain restrictive in both the United States and Japan added another layer of uncertainty for Equity investors, particularly as higher oil prices threaten to complicate the Inflation outlook.

Energy Supply concerns intensified after new attacks on Saudi Arabian energy and civilian infrastructure and further incidents involving ships in the Gulf. As per media sources, Saudi Arabia’s East-West oil pipeline has been shut down temporarily following a drone attack. The pipeline provides an important alternative export route that allows Saudi crude to bypass the Strait of Hormuz.

Middle East diplomatic uncertainty also remained elevated after a planned meeting involving Iran and other Gulf powers was postponed. Combined with continuing attacks around major energy transit routes, the developments reinforced concerns over the security of global crude supplies.

Top Market Movers: Catalyst Metals Limited (ASX:CYL) was the best-performing ASX 200 stock, rising AUD 0.390, or 6.112%, to AUD 6.770. Lovisa Holdings Limited (ASX:LOV) followed with a gain of AUD 1.240, or 5.732%, to AUD 22.870. Cleanaway Waste Management Limited (ASX:CWY) advanced AUD 0.120, or 4.669%, to AUD 2.690.

Among the major decliners, Deep Yellow Limited (ASX:DYL) fell AUD 0.125, or 8.834%, to AUD 1.290. Megaport Limited (ASX:MP1) dropped AUD 1.480, or 8.301%, to AUD 16.350, while Paladin Energy Ltd (ASX:PDN) declined AUD 0.710, or 6.907%, to AUD 9.570.

Commodity Update: The dollar remained steady as the yen held near a seven-month high, with investors assessing potential rate hikes from the Federal Reserve and Bank of Japan. Gold declined 0.86% to USD 43,670.10, while silver fell 1.21% to USD 64.41 and copper eased 0.29% to USD 14,186.10. Brent Crude surged 3.50% to USD 108.41 amid fresh Houthi attacks and strikes near the Strait of Hormuz, heightening concerns over regional supply disruptions and supporting oil prices near annual peaks.

Our Stance: Australian equities managed a modest rebound on Monday, with the S&P/ASX 200 closing 0.10% higher at 8,749.90. The improvement was broad enough for seven of 11 sectors to finish higher, with Health Care leading the recovery, while Consumer Staples, Financials, Energy and Utilities also advanced. However, Information Technology, Materials and Industrials remained under pressure.

The market backdrop remains challenging despite Monday’s positive close. Brent crude above USD 108 per barrel, continuing Middle East supply risks and expectations of tighter monetary policy in major economies could maintain upward pressure on bond yields and inflation expectations.

With geopolitical developments capable of driving sharp movements in oil, currencies and bond markets, investors may continue to favour relatively defensive exposures while monitoring energy prices, central-bank expectations and signs of broader market stabilisation.

On the technical front, the S&P/ASX 200 index advanced in the latest trading session, hwoever indicating near-term selling pressure. Despite the pullback, the index continues to hold above key support near 8,749.90, which remains crucial for maintaining the prevailing bullish bias. A sustained hold above this level could support a recovery towards recent highs, while a decisive break below 8,700 would weaken the technical structure and increase downside risk. On the upside, a decisive breakout above the recent swing high near 8,780.60 could reinforce bullish momentum and potentially pave the way for further gains towards the next target near 8,830.