Index Update: The S&P/ASX 200 closed higher on Wednesday, rising 70.70 points or 0.80% to 8,927.80. Over the last five days, the index is largely unchanged and currently sits 2.06% below its 52-week high. Sector performance was mixed, with more sectors finishing in negative territory despite the broader index gain. Materials emerged as the top-performing sector, advancing 3.53% and rebounding from its recent decline. The sector remains down 0.69% over the past five days. Energy also recorded gains, rising 3.14%, while Financials edged higher by 0.98%. Information Technology was the weakest performer, declining 9.40%. Utilities fell 2.05%, while Telecommunications Services dropped 2.01%. Consumer Discretionary declined 1.06%, A-REITs fell 1.17%, and Industrials slipped 0.72%. The Australian sharemarket recorded its second consecutive day of gains as investors returned to mining stocks, following renewed interest in commodities after a historic sell-off.

Macro Update: Living costs increased across all household groups in the twelve months to the December 2025 quarter, according to Australian Bureau of Statistics data, with annual rises ranging between 2.3% and 4.2% depending on spending patterns. Higher expenses for housing, food and non-alcoholic beverages, and recreation and culture were the primary drivers of the increase. Households relying mainly on government payments recorded the sharpest rise in living costs, largely due to higher electricity expenses and the reduction of state electricity rebates in Queensland and Western Australia, which increased out-of-pocket costs. In contrast, employee households experienced the lowest annual increase of 2.3%, supported by declines in mortgage interest charges, which form a larger share of their spending.

Top Market Movers: Among gainers, Yancoal Australia Limited (ASX:YAL) rose 8.996% to AUD 6.30, Silex Systems Limited (ASX:SLX) gained 6.686% to AUD 7.02, and South32 Limited (ASX:S32) advanced 6.208% to AUD 4.79. Among decliners, Xero Limited (ASX:XRO) fell 15.901% to AUD 80.82, HUB24 Limited (ASX:HUB) dropped 10.750% to AUD 88.01, while WiseTech Global Limited (ASX:WTC) declined 10.684% to AUD 51.25.

Commodity Update: The U.S. dollar traded largely steady on Wednesday as investors stayed cautious after a brief U.S. government shutdown ended, while the yen hovered near a two-week low ahead of a closely watched national election. Precious metals strengthened, with gold rising 2.74% to USD 5,071.90 and silver up 4.01% to USD 86.64. Copper slipped 0.77% to USD 13,365.40. Brent crude edged 0.10% higher to USD 67.98 amid renewed geopolitical tension in the Strait of Hormuz.

Our Stance: The S&P/ASX 200 closed higher, gaining 0.80% to 8,927.80, supported by strength in resource-linked sectors despite broader weakness across most industries. Commodity interest helped lift mining-related activity, while technology and defensive sectors lagged. Meanwhile, Australian living costs rose across all household groups over the year, driven by housing, food, and electricity expenses, although lower mortgage interest charges provided partial relief for wage-based households. Globally, precious metals advanced, crude oil edged higher, and the U.S. dollar remained stable amid political and economic caution. Overall, the market appears to be balancing inflation pressures with improving commodity sentiment, suggesting a cautiously stabilising outlook.

In the latest session, the S&P/ASX 200 Index advanced 70.70 points to close at 8,927.80, forming a bullish candlestick on strong trading volumes, reflecting sustained investor confidence. From a technical standpoint, the index continues to trade above its 21-period Simple Moving Average (SMA), which is acting as key dynamic support and reinforcing the short-term uptrend. The 8,840 support zone remains critical; holding above this level could encourage consolidation and further upside, while a break below may trigger increased near-term volatility. On the weekly chart, the index remains comfortably above its 50-period SMA, underscoring a strong medium- to long-term technical structure and confirming that the broader trend remains firmly positive despite short-term fluctuations.