index Update: Australian equities extended losses on Monday, with the S&P/ASX 200 falling 20.10 points, or 0.23%, to 8,766.40, slipping below its 125-day Moving Average and closing at a three-week low. Weakness in energy stocks weighed on sentiment following reports Iran had proposed reopening the Strait of Hormuz to the United States, easing some geopolitical Supply concerns. The benchmark has declined 2.09% over the past five sessions but remains broadly flat year to date. Market Breadth was negative, with nine of eleven sectors finishing lower. Materials stood out as the strongest-performing sector, rising 0.63% and partially recovering from recent weakness, though the sector remains down 1.45% over the past five trading days.

Macro Update: Geopolitical developments remained in focus as reports indicated Iran had offered to ease pressure on the Strait of Hormuz, signalling a possible de-escalation in disruptions to a critical global energy corridor. According to regional officials cited in media reports, the proposal is linked to a request for the United States to end its blockade measures on Iran, though it reportedly does not address Tehran’s nuclear programme. The developments coincided with Iran’s foreign minister visiting Russia for consultations, underscoring ongoing diplomatic efforts as tensions involving Iran, Israel and the United States continue to shape market sentiment.

Top Market Movers: Among gainers, Atlas Arteria (ASX:ALX) led the market, rising 13.39% to AUD 4.91, followed by Newmont Corporation (ASX:NEM), which advanced 6.79% to AUD 166.16 as gold-linked names found support, while Megaport Limited (ASX:MP1) gained 5.06% to AUD 9.34. On the downside, Resolute Mining Limited (ASX:RSG) was the weakest performer, falling 8.19% to AUD 1.29, while Origin Energy Limited (ASX:ORG) declined 5.01% to AUD 12.13 and Viva Energy Group Limited (ASX:VEA) slipped 3.75% to AUD 2.31, reflecting pressure across parts of the energy complex.

Commodity Update: The U.S. dollar held steady on Monday as uncertain progress on resolving the Middle East conflict kept markets cautious, while the Japanese yen hovered just below the 160.00 level ahead of the Bank of Japan’s policy decision. Gold declined 0.13% to USD 4,735.20 and silver slipped 0.50% to USD 76.07. Copper gained 0.29% to USD 13,352.10. Brent Crude rose 2.00% to USD 107.48 amid limited progress in U.S.-Iran talks.

Our Stance: Australian equities extended their pullback as weakness in energy stocks and renewed geopolitical uncertainty pushed the S&P/ASX 200 to a three-week low, with negative Market Breadth underscoring cautious risk appetite. While easing rhetoric around the Strait of Hormuz offered some relief on Supply disruption concerns, unresolved tensions and firm oil prices kept sentiment restrained. Materials provided a partial offset, while sharp divergence among top gainers and losers reflected selective rather than broad-based risk taking. In commodities, higher crude prices contrasted with softer precious metals, reinforcing an uneven macro backdrop. Overall, markets remain caught between geopolitical headline risk and sector-specific resilience, with Volatility likely to persist while investors assess whether diplomatic signals translate into more durable support for risk assets.

The S&P/ASX 200 slipped by 20.10 points in the latest session, forming a small bearish candlestick that reflects softening sentiment and a gradual uptick in selling pressure. From a technical perspective, the index continues to trade below its 21-period Simple Moving Average (SMA), which is acting as a key dynamic resistance and reinforcing the prevailing near-term bearish structure. While the index is attempting to stabilize around current levels, immediate support is placed near 8,710.30. Holding above this zone could help contain downside risks in the short term. However, a decisive breakdown below this level may weaken sentiment further, potentially triggering an extended corrective phase and elevating near-term market Volatility.