Key Highlights

  • The Energy sector jumped 2.45% as oil breached $US100/bbl due to Middle East supply risks.
  • Markets priced in a 78% chance of a rate hike next week, sending 10-year yields to a 15-year high.
  • Materials fell nearly 5% as China iron ore bans and a production downgrade for Northern Star weighed on miners.
  • Rising yields and a 90% trial-failure crash for Immutep triggered a mass exit from high-growth sectors.

Last week was a volatile period for the Australian market, characterized by a "geopolitical energy shock" that saw the S&P/ASX 200 drop 2.64% to close at 8,617 points. While the Energy sector thrived, almost every other industry group struggled as inflation fears and interest rate hike expectations surged.

The "Hormuz" Premium & RBA Fears

  • The defining narrative of the week was the escalation of conflict in the Middle East. Reports of tanker attacks in the Strait of Hormuz sent WTI Crude soaring above $US100/bbl.
  • This spike in energy costs immediately translated into higher domestic inflation expectations. Consequently, the "Big Four" banks' economists (CBA, ANZ, NAB, and Westpac) all shifted their forecasts, now predicting a 25-basis point rate hike at the upcoming March 17 RBA meeting. The market probability of a hike jumped from under 30% to nearly 78% in a matter of days.

ASX Sector Weekly Performances

Energy (XEJ): The Sole Outlier (+2.45%)

Energy was the only sector to finish the week in the green. Investors used these stocks as a primary hedge against rising global tensions.

  • Top Movers: Yancoal (YAL) hit all-time highs, while Santos (STO) and Woodside (WDS) gained on massive revenue upgrades linked to the oil price spike.

Materials (XMJ) & Resources (XJR): Deep Pullbacks (-4.93% / -5.10%)

Despite a mid-week rebound in lithium, the mining heavyweights were hammered by a double blow:

  • The China Dispute: BHP fell 5.7% for the week as China extended its ban on Newman fines iron ore shipments amid a month-long contract dispute.
  • Gold Meltdown: Despite gold's status as a safe haven, Northern Star (NST) plummeted 18.8% on Friday alone after downgrading its FY26 production guidance due to milling issues at KCGM.

Health Care (XHJ): The "Friday the 13th" Horror (-4.61%)

The sector was dragged down by one of the largest single-day biotech collapses in ASX history.

  • The Immutep (IMM) Crash: Shares in Immutep fell over 88% on Friday after its Phase III lung cancer trial was terminated for futility. This triggered a broader exit from high-risk biotech and healthcare names like CSL and ResMed.

Info Tech (XIJ): The Yield Victim (-5.54%)

As the Aussie 10-year bond yield touched 4.96% (a level not seen since 2011), the Tech sector suffered the most.

  • High-growth companies like WiseTech (WTC) and Xero (XRO) saw significant valuation de-ratings as the cost of capital increased.

Weekly Market Summary

The S&P/ASX 200 index ended the week down 2.64% at 8,617 points. The narrative has shifted from "soft landing" optimism to stagflation fears, high energy prices (Energy +2.45%) coupled with aggressive interest rate hike expectations that are currently crushing growth-focused sectors like Tech and Health Care.