Sydney, May 13, 2026, 03:02 AEST
- The S&P/ASX 200 slipped 0.36% to 8,670.70, marking a third session in the red. Banks and tech names dragged the index lower; miners offset some of the decline.
- The timing of the selloff was key—it landed right ahead of budget-night moves on negative gearing and capital gains tax, both closely linked to housing, the banks’ mortgage holdings, and household wealth.
- Traders aren’t betting on swift rate cuts yet: according to Kalshi, there’s a 65% chance the RBA holds steady in June. Over on Polymarket, odds for “No Change” sit at 77%, with 22% pointing to a hike. Kalshi
The Australian sharemarket slipped again on Tuesday, weighed down mostly by local factors. The S&P/ASX 200 dropped 31.10 points, or 0.36%, finishing at 8,670.70. That marks a three-day decline of 2.4% as traders moved out of banks ahead of the federal budget, with eyes on Commonwealth Bank’s update coming Wednesday.
The session’s chart looked choppy, not directional. The index slid to 8,619.1—its lowest mark in five weeks—before rebounding a bit as miners found support on firmer copper, iron ore and oil prices. That divergence says plenty: investors didn’t head for the exits on Australia as a whole; instead, they trimmed positions in sectors most exposed to housing, pricier funding, and lofty growth valuations.
Seven out of 11 sectors ended lower. Materials managed a 2.7% jump, utilities added 2.1%. On the flip side, technology slid 2.1%, consumer non-cyclicals slipped 1.9%, and healthcare lost 1.8%. Breadth was weak: 134 stocks finished in the red, just 61 closed higher.
Housing sat squarely in the spotlight. The budget held firm on negative gearing caps—the tax break that lets investors offset rental losses—and moved to phase out the 50% capital gains tax discount on certain asset sales. Those tweaks aren’t an immediate drag on bank profits, but they start to reshape property appetite, market churn, and how households stack up financially.
This drove the banks lower. IG market analyst Tony Sycamore pointed out that residential mortgages account for around 45% to 50% of the big four’s assets. That leaves them on the hook if budget moves take the heat out of property and ramp up mortgage pressure. NAB shed 2.13%, ANZ slipped 1.87%, CBA fell 1.44%, while Westpac declined 0.97% in afternoon action.
Rates didn’t make it any easier to go against the move. The RBA bumped up its cash-rate target by 25 basis points to 4.35% last week, blaming inflation pressures tied to Middle East fuel prices and warning that risks were still skewed upwards. With a basis point equal to one-hundredth of a percentage point, that’s a quarter-point increase—raising the cost of funds for banks and property stocks, right as tax rules are in flux.
Macro numbers were no relief. NAB flagged a spike in purchase costs—up 4.5% for April—while product prices only climbed 1.8%. That margin squeeze means businesses are shelling out more for inputs but can’t raise their own prices enough to keep pace. “Pressure on margins is increasing,” NAB’s Gareth Spence said. Forward orders have fallen 11 points since February. Nab
Tech stocks stumbled on their own issues. Life360 shares tumbled—Q1 revenue climbed 38% to $143.1 million, with ad revenue surging 329%, but the market zeroed in on concerns over the pace and quality of user growth, plus worries about execution risk. CFO Russell Burke described the quarter as one of “strong growth and financial performance.” That wasn’t enough. Investors balked at the sluggish increase in monthly active users and rising operating expenses. Life360 Inc.
DroneShield flagged a governance issue that rattled the tape. The counter-drone firm disclosed ASIC is probing its ASX announcements and other information from Nov. 1 to Nov. 20, 2025, as well as trades in its shares made from Nov. 6 to Nov. 12. The stock dropped, with investors wary of lingering regulatory risk.
Bulls aren’t backing down. BHP and Rio Tinto both notched new highs during the session, while Fortescue was also up, riding a stronger resources sector on the back of gains in copper and iron ore. That’s important for anyone betting long: Australia’s index isn’t just about banks—a surge in commodities can help cushion domestic-policy headwinds, particularly if the RBA holds steady in June instead of tightening again.
Here’s the bearish read: pausing isn’t the same as cutting. Polymarket’s “No Change” odds sit at 77%, with Kalshi showing 65% for rates staying put—signs markets aren’t bracing for another quick hike, but there’s no whiff of looser policy yet. Banks, tech, and healthcare are still staring down a 4.35% cash rate, tighter fiscal policy, slackening business demand, and a budget designed to cool property-investor appetite. Polymarket
The real question is if CBA’s update will calm the banks or just reinforce the market’s wariness. Right now, the ASX isn’t following Wall Street’s lead so much as reacting to local shifts: miners are in demand as an inflation shield, but banks and high-priced growth stocks are feeling the weight of a slower, policy-driven backdrop.
