Index Update: The Australian share market finished the first full week of 2026 on a softer note, with the S&P/ASX 200 falling 3.0 points on Friday to close at 8,717.8, after early gains faded. The index was largely flat over the week but remains around 4.36% below its 52-week high. Sector performance was mixed, with five sectors rising and six falling, while energy led the gains, climbing 2.12% on the day despite a slight weekly decline.

Macro Update: Global economic growth is projected to slow to 2.7% in 2026 from 2.8% in 2025, before rising to 2.9% in 2027, remaining below the pre-pandemic average of 3.2%, according to a United Nations report. The World Economic Situation and Prospects report noted that despite a sharp increase in U.S. tariffs last year, global activity remained resilient due to front-loaded shipments, inventory accumulation, consumer spending, and supportive monetary conditions. U.S. growth slowed to 1.9% in 2025, with forecasts of 2.0% in 2026 and 2.2% in 2027, while inflation is expected to gradually moderate.

Top Market Movers: Codan Limited (ASX:CDA) led gains, rising AUD 5.33 or 16.89% to AUD 36.89, followed by Karoon Energy Ltd (ASX:KAR) up AUD 0.075 (+5.14%) to AUD 1.535, and James Hardie Industries PLC (ASX:JHX) adding AUD 1.58 (+5.12%) to AUD 32.42. On the downside, Rio Tinto Limited (ASX:RIO) fell AUD 9.57 (-6.27%) to AUD 143.06, Nickel Industries Limited (ASX:NIC) dropped AUD 0.045 (-4.69%) to AUD 0.915, and Digico Infrastructure REIT (ASX:DGT) lost AUD 0.12 (-4.27%) to close at AUD 2.69.

Commodity Update: The U.S. dollar strengthened in early Asian trade on Friday as investors awaited the latest U.S. jobs report and watched an upcoming Supreme Court ruling on President Donald Trump’s emergency tariff powers. Commodities traded higher, with gold rising 0.34% to USD 4,475.20, silver surging 1.56% to USD 76.32, and copper gaining 0.84% to USD 12,812.00. Brent crude climbed 0.71% to USD 62.43, marking a third weekly gain.

Our Stance: The Australian share market ended the first full week of 2026 on a subdued note, with the S&P/ASX 200 closing marginally lower at 8,717.8, reflecting mixed sector performance despite energy gains. Global growth concerns, highlighted by the U.N.’s projection of a slowdown to 2.7% in 2026, continue to weigh on sentiment, though resilient consumer spending and monetary support provide some cushioning. Commodity strength, particularly in gold, silver, copper, and Brent crude, suggests selective opportunities, but market participants may remain cautious amid moderating global growth and geopolitical uncertainties.

In its latest session, the S&P/ASX 200 Index declined 3.00 points, forming a small bearish candlestick on rising trading volume a combination that signals increased investor caution and reinforces the prevailing short-term bearish tone. On the daily chart, the index continues to trade above its 21-period Simple Moving Average (SMA), which remains a key area of immediate support. Immediate support is positioned near the 8,630 level, and holding above this zone will be crucial for stabilising recent price action and restoring near-term confidence. From a broader weekly perspective, however, the index continues to trade above its 50-period SMA, a constructive long-term signal that points to the potential for renewed upside momentum once short-term selling pressure begins to ease.