Index Update: The Australian sharemarket ended lower on Thursday, with the S&P/ASX 200 Index falling 20.10 points, or 0.23%, to close at 8,633.20, slipping below its 20-day moving average. The benchmark index has declined 0.61% over the past five trading sessions and remains broadly flat on a year-to-date basis.

Market sentiment was weighed down by weakness in major banking stocks, while escalating geopolitical tensions in the Middle East added to investor caution. Fresh US strikes on Iran reignited concerns around the ongoing regional conflict, which has contributed to heightened volatility across global financial markets in recent months.

Despite the overall decline, market breadth remained relatively positive, with seven of the 11 sectors finishing in positive territory. Energy emerged as the strongest-performing sector, advancing 1.46% as investors responded to rising geopolitical risks and their potential impact on global energy markets. The sector's gain partially offset recent weakness, although it remains down 0.72% over the past five days. In contrast, Information Technology was the weakest performer, falling 2.24%, while Financials declined 1.45%, exerting the greatest drag on the benchmark index.

Macro Update: S&P Global Ratings expects the global economy to expand by 3% in 2025, supported by easing inflation, resilient labour markets and sustained consumer spending. The agency anticipates growth moderation in the United States and China, while the Eurozone is projected to recover and emerging markets are expected to remain relatively stable.

India continues to stand out among emerging economies, supported by a resilient workforce, rising consumer demand and government-led infrastructure investment. Efforts to ease inflationary pressures and improve financial inclusion have also contributed to economic activity. S&P Global Ratings recently reaffirmed its forecast for India's economic growth at 6.8% for the current fiscal year.

Despite the broadly stable outlook, geopolitical tensions and varying regional economic conditions remain key risks. S&P noted that soft economic landings and potential policy rate cuts could improve global credit conditions, although elevated borrowing costs and geopolitical uncertainties may continue to challenge lower-rated borrowers.

Top Market Movers: Among the top gainers, TUAS Limited (ASX:TUA) rose 5.88% to AUD 2.70, Karoon Energy Ltd (ASX:KAR) advanced 4.59% to AUD 2.05, and Lendlease Group (ASX:LLC) gained 4.58% to close at AUD 2.74. On the downside, Alcoa Corporation (ASX:AAI) declined 8.34% to AUD 93.90, Ora Banda Mining Ltd (ASX:OBM) fell 6.42% to AUD 1.02, and Superloop Limited (ASX:SLC) dropped 4.26% to finish at AUD 3.60.

Commodity Update: The U.S. dollar traded cautiously as escalating geopolitical tensions in the Middle East weighed on market sentiment, while a sharp rise in U.S. consumer inflation added uncertainty around the Federal Reserve’s policy outlook. Commodity markets came under pressure, with gold declining 0.91% to USD 4,096.00 per ounce, silver falling 2.02% to USD 63.44 per ounce, and copper easing 0.88% to USD 13,405.90 per tonne. Meanwhile, Brent crude oil advanced 2.10% to USD 95.02 per barrel after fresh U.S. strikes on Iran and reports that Tehran suspended vessel traffic through the Strait of Hormuz.

Our Stance: The Australian sharemarket ended lower on Thursday as weakness in major banking stocks and escalating geopolitical tensions in the Middle East weighed on investor sentiment. The S&P/ASX 200 fell 0.23% to 8,633.20, although seven of the 11 sectors finished higher, led by Energy, which benefited from rising oil prices. Globally, S&P Global Ratings maintained a constructive outlook, forecasting 3% economic growth in 2025, supported by easing inflation, resilient labour markets and steady consumer spending, while reaffirming India’s 6.8% growth forecast. Among local movers, TUAS Limited (ASX:TUA), Karoon Energy Ltd (ASX:KAR) and Lendlease Group (ASX:LLC) led gains, while Alcoa Corporation (ASX:AAI) was the weakest performer. Looking ahead, resilient global growth expectations may provide support, though geopolitical developments and commodity market volatility are likely to keep investors cautious in the near term.

The S&P/ASX 200 declined by 20.10 points in the latest trading session, forming a bearish candlestick pattern that reflects continued weakness in market sentiment. From a technical standpoint, the index remains below its 21-day Simple Moving Average (SMA), which continues to act as a key dynamic resistance level and limit upside progress. Immediate support is situated near 8,540.90, and maintaining this level could help stabilize sentiment and support the broader market structure. However, a decisive break below 8,540.90 would signal a deterioration in technical conditions, increasing the likelihood of a deeper corrective phase and heightened market volatility in the near term.