SYDNEY, March 12, 2026, 04:35 AEDT
- The S&P/ASX 200 climbed 0.59% to close at 8,743.50 on Wednesday, pushing its rebound into a second day. 1
- Miners picked up 2.2% while financials advanced 0.9%. Heavyweights Fortescue, Rio Tinto, and BHP did much of the lifting. 2
- Interest-rate swaps are pricing in roughly a 75% probability that the RBA will lift rates by 25 basis points—essentially a quarter-point hike—when it meets next week. 3
Australian stocks notched a second consecutive advance on Wednesday, as the S&P/ASX 200 finished up 0.59% at 8,743.50. Banks and miners provided most of the lift, with the index recouping more ground after last week’s pullback. 1
The rebound carries weight, with investors now grappling with a stickier rates outlook, not relief. Interest-rate swaps, the go-to tool for traders gauging policy bets, on this day were pricing in roughly a 75% likelihood the Reserve Bank of Australia hikes the cash rate 25 basis points to 4.1% next week. That shift came after Deputy Governor Andrew Hauser flagged that the Middle East oil shock may fuel inflation risks. 3
The market’s stuck in a tough spot. Numbers show the benchmark shed 3.68% across the last five sessions, managing to edge up just 0.34% for 2026. Last week alone, A$130 billion ($91.4 billion) vanished from Australian equities—jolted by the Middle East conflict’s hit to global risk appetite. 1
Materials took the lead. Australian miners picked up 2.2%, driven by a 3.7% jump for Fortescue, Rio Tinto up 1.1%, and BHP higher by 1.4%. Financials managed a 0.9% gain. Shares in healthcare dropped 1.4%, and local tech names slipped 1.6%. 2
Australia’s policy outlook has swung sharply. Westpac, National Australia Bank, and Commonwealth Bank all anticipate the RBA will tighten next week. “The balance of probabilities has shifted,” said Belinda Allen, CBA’s head of Australian economics, pointing to increased odds of moves in both March and May. 3
Hauser didn’t mince words. In an RBA interview transcript, he warned of “a very genuine debate” coming at the March meeting. Inflation, he said, remains “too high,” and higher energy prices, he added, are making things tougher for the board. 4
Jamie Hannah, deputy head of investments and capital markets at VanEck Australia, noted the rebound was mostly superficial. “In the short term, we are just going to continue to see volatility,” he said, suggesting it might make sense for the RBA to act sooner rather than later. 2
The relief rally might not last. By late Wednesday, Brent crude was up almost 4%, trading near $91 a barrel following new attacks on vessels in the Strait of Hormuz. Reuters reported that despite the International Energy Agency preparing an unprecedented emergency stock release, energy traders still aren’t buying that the supply shock is under control. 5
Phil O’Donaghoe, chief economist at Deutsche Bank, flagged that any additional escalation could “prompt a pause” from the RBA—highlighting just how unpredictable the rates path is right now. Equities might not have it so easy if oil shocks broaden. A NAB survey out Tuesday pegged business confidence at -1 for February, dipping into the red for the first time in almost a year.
