Index Update: The S&P/ASX 200 closed lower on Friday, falling 11.90 points (0.14%) to 8,617.10. Over the past five days, the index has declined 2.64%, and it is down 11.20% over the last 52 weeks. The Australian share market recorded its lowest weekly close since December, as the escalating US-Israel war with Iran pushed oil prices higher and weighed on investor sentiment.

Despite the overall decline in the benchmark index, six of the 11 sectors finished higher. Financials led the gains, rising 1.03% and rebounding from recent losses, though the sector remains down 0.37% over the past five days.

Sector performance was mixed across the market. Information Technology (+0.80%), Telecommunications Services (+0.68%), Energy (+0.39%), Utilities (+0.33%), and Consumer Discretionary (+0.22%) also ended in positive territory. On the downside, Materials (-2.06%) was the worst-performing sector and the largest drag on the market. Other sectors closing lower included Health Care (-0.32%), Consumer Staples (-0.30%), Industrials (-0.26%), and A-REITs (-0.18%).

Macro Update: Oil markets remained volatile as rising Middle East tensions added to supply concerns. Iran’s Supreme Leader warned that Iran would keep the Strait of Hormuz closed and urged regional countries to shut US bases or face possible retaliation, while Donald Trump signalled the conflict would continue. 

Top Market Movers: Among the top gainers, DroneShield (ASX:DRO) climbed to AUD 4.17, rising AUD 0.25 (6.38%), while Dalrymple Bay Infrastructure (ASX:DBI) advanced to AUD 4.93, up AUD 0.28 (6.02%). nib holdings (ASX:NHF) also moved higher, closing at AUD 6.14, gaining AUD 0.33 (5.68%). On the downside, Northern Star Resources (ASX:NST) dropped to AUD 21.75, down AUD 5.02. IperionX (ASX:IPX) fell to AUD 5.26, losing AUD 0.86, while Karoon Energy (ASX:KAR) declined to AUD 1.84, down AUD 0.14.

Commodity Update: The U.S. dollar remained firm on Friday, heading toward its second weekly advance since tensions escalated in Iran, as global uncertainty supported demand for safe-haven assets. In commodities, gold slipped 0.22% to USD 5,114.70, silver declined 0.62% to USD 84.58, and copper eased 0.31% to USD 12,944.59. Meanwhile, Brent crude fell 0.71% to USD 99.75 after the U.S. granted a 30-day license allowing countries to purchase Russian oil shipments currently stranded at sea.

Our Stance: The S&P/ASX 200 ended Friday slightly lower at 8,617.10, marking its weakest weekly close since December as rising Middle East tensions lifted oil prices and pressured investor sentiment. Sector performance was mixed, with financials leading gains while materials weighed on the index. In commodities, Brent crude remained near USD 100 despite a temporary US waiver allowing purchases of stranded Russian oil, while precious and base metals eased. Major movers included DroneShield Limited and Dalrymple Bay Infrastructure Limited on the upside, while Northern Star Resources Ltd led declines. In our view, markets may remain volatile as geopolitical risks continue to shape energy prices and investor sentiment.

In its latest session, the S&P/ASX 200 slipped 11.90 points, forming a bearish candlestick on higher trading volume. The increase in volume during the decline points to rising investor caution and suggests short-term weakness in market sentiment. Technically, the index remains below its 21-period Simple Moving Average (SMA) on the daily chart, which is acting as a key near-term resistance level. This indicates that upside momentum may stay limited unless the index manages to reclaim this barrier. On the downside, immediate support is seen around the 8,460 level. Holding above this zone will be important to stabilise sentiment and reduce the risk of a deeper near-term correction.