Index Update: The S&P/ASX 200 fell 89.60 points, or 0.98%, to 9,038.20 on Thursday, marking its sharpest decline in three months. Generation Development Group Limited and Magellan Financial Group Limited were the worst performers, falling 15.36% and 14.03%, respectively. Nine of 11 sectors declined, led by Consumer Discretionary (-3.18%) and Information Technology (-2.38%). Health Care was the only notable gainer, rising 0.23%. The sell-off followed hotter-than-expected inflation, lifting expectations of another RBA rate hike this year.

Macro Update: Household spending in Australia rose 1.1% in July 2026, extending its upward trend for a third consecutive month, according to seasonally adjusted figures from the Australian Bureau of Statistics (ABS). The increase followed gains of 1.0% in June and 1.2% in May. Recreation and culture led the monthly growth, rising 1.5%, supported by higher spending on gambling activities, major sporting events and cinema attendance.

Food spending increased 1.0%, while Hotels, cafes and restaurants rose 1.1%, with price increases contributing to both categories. Health spending also climbed 1.2%, driven by higher outlays on pharmaceuticals, healthcare services, eye care and dental treatment. In nominal terms, household spending was 7.0% higher than a year earlier, recording its fastest annual growth since June 2023.

Fuel spending increased 2.2% in nominal terms following a 16 cents-per-litre rise in fuel excise duty from 1 July. However, ABS experimental data showed fuel spending volumes fell 4.7% in July, reversing a 7.9% increase in June.

Top Market Movers: Ramsay Health Care Limited (ASX:RHC) led the gainers, rising 13.721% to AUD 50.060, followed by Domino's Pizza Enterprises Limited (ASX:DMP), up 7.978% to AUD 20.300, and Tabcorp Holdings Limited (ASX:TAH), which gained 5.494% to AUD 0.960. Generation Development Group Limited (ASX:GDG) was the top decliner, falling 15.365% to AUD 3.250, followed by Magellan Financial Group Limited (ASX:MFG), down 14.028% to AUD 9.500, and Centuria Capital Group (ASX:CNI), which declined 10.527% to AUD 1.190 in Thursday's Trading session on the ASX.

Our Stance: The S&P/ASX 200 dropped 0.98% to 9,038.20 on Thursday, recording its sharpest decline in three months as hotter Inflation lifted expectations of another RBA rate hike. Nine of 11 sectors fell, led by Consumer Discretionary and Information Technology, while Health Care gained 0.23%. Household spending rose 1.1% in July, extending its third consecutive monthly increase, with annual nominal growth reaching 7.0%. Ramsay Health Care led market gains, while Generation Development Group was the biggest decliner. Overall, elevated inflation and rising rate expectations could keep market sentiment cautious, despite resilient household spending.

On the technical front, the S&P/ASX 200 index declined by 89.60 points in the latest trading session. Despite the pullback, the index continues to hold above key support near 9,000, which remains crucial for maintaining the prevailing bullish bias. A sustained hold above this level could support a recovery towards recent highs, while a decisive break below 9,000 would weaken the technical setup and increase downside risk. On the upside, a decisive breakout above the recent swing high near 9,070 would reinforce bullish momentum and potentially pave the way for further gains towards the next target near 9,130.