Sydney, March 25, 2026, 08:20 AEDT
Shares of Commonwealth Bank of Australia ended Tuesday’s session down 1.8% at A$171.12, underperforming as the broader market eked out a 0.16% gain despite surrendering much of its early advance. Even so, CBA is still up 6.6% for the year. 1
This matters because CBA’s been the sector’s standard-bearer. Shares surged up to 8.4% after February’s half-year numbers landed, with the bank notching a record A$5.45 billion first-half profit alongside stronger growth in home loans, business lending, and deposits. Michael Haynes at Atlas Funds Management pointed to business-bank expansion and what he called “operational excellence across mortgages” as standout features. 2
Banks didn’t all move in lockstep. Westpac shed 1.56%, National Australia Bank slid 4.45%, but ANZ managed a 0.5% gain—suggesting investors were selective across the sector instead of pulling out wholesale. 3
The focus now shifts to rate expectations if growth falters. According to IG, traders trimmed roughly 25 basis points from the anticipated RBA hikes by year-end, lowering the implied peak to 4.75% versus the earlier 5%. IG also noted that softer sentiment, alongside the likelihood of skipping a hike, put pressure on the big banks. 4
Fresh numbers on consumers painted a starker picture. The ANZ-Roy Morgan consumer confidence index sank 5.4 points to 63.1, hitting its lowest mark since the survey started in 1973. Weekly inflation expectations ticked up to 6.9%. ANZ economist Sophia Angala pointed to the Middle East conflict’s effect on oil prices and the economic backdrop as likely drivers for the slide, adding that last week’s RBA decision also weighed. 5
The RBA hiked the cash rate by 25 basis points last week, taking it to 4.1%, after a narrow 5-4 board split. Governor Michele Bullock noted that board members mostly disagreed on when, not if, to act—keeping inflation risks squarely in focus, despite softening confidence. 6
Oil remains under strain. Brent crude tumbled over 10% Monday after U.S. President Donald Trump put off possible strikes, Reuters said. Prices bounced back a bit Tuesday, sitting just above $100 a barrel, as Iran rejected talks with Washington and shipping through the Strait of Hormuz—vital for oil—stayed mostly shut. 7
Oil could easily push into the $120 to $150 per barrel zone if the shock drags on, CBA chief economist Luke Yeaman warns. That scenario, he says, spells deeper share-market losses, a firmer U.S. dollar, and rising bond yields. Softer landings are still on the table—Yeaman mentions the possibility of a U.S. pullback or a partial reopening of Hormuz—but in his view, a protracted conflict looks like the base case. 8
