SYDNEY, March 31, 2026, 04:23 AEDT
The S&P/ASX 200 slipped 0.6% to finish at 8,461 on Monday, after falling as much as 1.5% in early trading. Banks and tech names led the decline, but miners and energy stocks bucked the trend, moving higher as oil and aluminium prices rallied. 1
Investors are feeling the pinch on two sides. Brent crude’s sharp rally has stiffened bets on higher rates, and according to HSBC chief economist Paul Bloxham, the longer this conflict drags on, “the more disruptive the shock is expected to be” for growth. 2
Westpac on Monday revised its outlook, predicting the Reserve Bank of Australia will lift rates by 25 basis points in May, June, and again in August. Over in Canberra, the government slashed fuel excise—a tax on petrol and diesel—by half for three months, pegging the move’s cost at roughly A$2.55 billion. 1
Banks bore the worst of it, Westpac tumbling 4% as investors dumped the sector. This local slide mirrored Wall Street’s sharp Friday losses—both the Dow and S&P 500 dropped 1.7%—after worries flared that the conflict could stoke inflation and hurt global growth. 1
Miners kept the index from sliding further. Shares in Rio Tinto jumped 4.9%, South32 added 4.1%—both boosted as aluminium prices touched their highest levels in four years. Oil and gas names caught a lift too, with Brent holding near $115 a barrel after posting its sharpest March gain ever. 1
Luci Ellis, now chief economist at Westpac and a former RBA assistant governor, pointed to a “surprisingly rapid pass-through” from fuel costs into broader prices as the reason for the bank’s updated stance. The RBA had already pushed its cash rate up to 4.1% this month. “Central banks cannot change that,” Assistant Governor Christopher Kent said of the supply shock, adding they can only try to head off the risk of entrenched inflation. 1
Things can flip fast, though. According to JPMorgan’s Bruce Kasman, just one more month of turmoil in the Strait of Hormuz could push oil up to $150 per barrel. On the other hand, if the route truly reopens, that would cool the whole commodity space, likely erasing some of Monday’s rally driven by miners. 1
Policy is another issue hanging over local energy names. Shell Australia chair Cecile Wake cautioned against “short-term fixes” while Canberra considers tapping more LNG windfall revenue; she argued that steps like these risk undercutting new projects just as Australia’s export haul is on the verge of climbing. 3
Earlier, Asian markets failed to provide much relief—Japan’s Nikkei slid 4.7% and South Korea’s benchmark dropped 4.2%. U.S. equities managed to regain their footing after some volatile moves. For Australian shares, it’s a push and pull: gains for commodity names as prices move higher, but elsewhere, investors eye the drag from slower growth and the threat of rising rates. 1
