index Update:  Australian equities closed lower on Thursday, with the S&Amp;P/ASX 200 falling 50.20 points, or 0.57%, to 8,793.40, slipping below its 200-day Moving Average as investor sentiment remained cautious. The benchmark has declined 1.80% over the past five sessions, while remaining broadly unchanged year to date. The session marked the third straight loss, as uncertainty surrounding the Iran conflict continued to weigh on risk appetite despite the indefinite extension of a ceasefire by US President Donald Trump. Sector performance was mixed, with nine of eleven sectors finishing lower, while Energy outperformed, rising 3.08% and recovering some ground after recent declines.

Macro Update: Ukrainian President Volodymyr Zelenskyy has warned that a prolonged conflict involving Iran could create indirect risks for Ukraine’s access to critical US-supplied missile defence systems, including Patriot interceptors. He noted Ukraine continues to procure weapons through NATO’s PURL programme, which enables allied funding for purchases such as anti-ballistic missiles for Patriot systems. However, he cautioned that escalating tensions in the Middle East could place broader defence packages for Ukraine at risk, raising concerns over future Supply availability.

Top Market Movers: Energy and technology names led the advance, with Karoon Energy Ltd (ASX:KAR) rising 7.84% to AUD 2.20, supported by strength across the energy complex. Silex Systems Limited (ASX:SLX) gained 6.00% to AUD 6.54, while Beach Energy Limited (ASX:BPT) added 5.65% to AUD 1.215, extending momentum in the sector. Consumer discretionary and materials stocks lagged, with Temple &Amp; Webster Group Ltd (ASX:TPW) falling 8.18% to AUD 6.06. Lynas Rare Earths Limited (ASX:LYC) declined 6.70% to AUD 18.39, while Perenti Limited (ASX:PRN) lost 6.28% to AUD 1.94.

Commodity Update: The dollar hovered near a one-and-a-half-week high on Thursday as tensions between the U.S. and Iran and stalled peace efforts lifted oil above USD 100 per barrel, dampening sentiment. Gold slipped 0.63% to USD 4,723.05, silver dropped 2.47% to USD 76.05, and copper declined 1.34% to USD 13,256.50. Brent Crude gained 1.84% to USD 103.73 amid limited shipping activity in the Strait of Hormuz.

Our Stance: Australian equities extended their pullback as geopolitical uncertainty, weaker risk appetite and rising oil prices combined to pressure sentiment, pushing the S&Amp;P/ASX 200 below its 200-day Moving Average. While Energy provided support amid firmer crude prices and select stocks posted sharp gains, broader Market Breadth remained negative as investors rotated defensively. Zelenskyy’s warning over potential defence Supply risks added to macro caution, while Commodity moves reflected concern over Middle East disruptions. With the index now in a three-session slide, markets appear increasingly sensitive to geopolitical headlines, though resilience in energy and defensive positioning may help stabilise sentiment if tensions do not escalate further.

The S&Amp;P/ASX 200 declined by 50.20 points in the latest session, forming a bearish candlestick that signals weakening sentiment and rising selling pressure. Despite the pullback, the index continues to trade above its 21-period Simple Moving Average (SMA), which is acting as a key dynamic support and helping maintain the broader bullish structure. Holding above this level may provide near-term stability and limit immediate downside risks. However, immediate support is seen near 8,720.50. A decisive break below this level could weaken sentiment further, potentially triggering a deeper corrective phase and increasing short-term Volatility.

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