SYDNEY, March 17, 2026, 09:16 (AEDT)
ASX-listed Commonwealth Bank of Australia (CBA.AX) closed up 1.02% at A$175.53 on Monday, March 16, its highest level in more than two weeks, as investors bought rate-sensitive lenders even while the broader Australian market slipped ahead of the Reserve Bank of Australia’s policy call. The S&P/ASX 200 ended down 0.4%. 1
The move matters because CBA is a heavyweight in Australia’s bank sector and its gain helped offset part of a broader market pullback as miners sold off on weaker commodity prices. Traders are also treating Australia as an outlier in a week packed with central bank meetings, with Reuters reporting 23 of 30 economists expect the RBA to raise rates on Tuesday. 1
Banking and financial stocks rose 0.4% on Monday, with CBA leading the group. Energy shares also gained, but miners fell 2.4%; Rio Tinto dropped 2%, Fortescue lost 3.9% and BHP slid 1.2%, which made CBA’s strength stand out more than the headline index move suggested. 1
“Geopolitical risk premium could persist,” Cliff Man, chief executive at ETF Shares, told Reuters, even if oil prices ease once the conflict subsides. For Australian banks, that matters because the same oil shock has revived inflation fears and hardened the case for another RBA move. 1
Only days ago, Commonwealth Bank joined Westpac and National Australia Bank in calling for another increase. Belinda Allen, CBA’s head of Australian economics, said the “balance of probabilities has shifted”, while Deutsche Bank’s Phil O’Donaghoe said his bank’s earlier view that March risk had faded was wrong and a hike was now its base case unless the Middle East conflict worsened further. 2
Governor Michele Bullock has kept that option alive. Earlier this month she said each meeting was “live” and warned that a prolonged rise in energy prices could slow demand and growth while still pushing inflation higher; a 25-basis-point move — one basis point is one hundredth of a percentage point — would lift the cash rate to 4.1% from 3.85%. 3
CBA was already carrying momentum from last month’s results. The bank posted record first-half cash profit of A$5.45 billion, and the shares jumped as much as 8.4% on the day as growth in home loans, business lending and deposits outweighed a small squeeze in net interest margin, a key measure of the gap between lending and deposit rates. 4
Michael Haynes of Atlas Funds Management said the standout in that result was business-bank growth and “operational excellence” in mortgages. CBA also said it kept a 25.4% share of the home-loan market, underlining the scale that has helped it pull ahead of rivals. 4
The backdrop across the big banks has stayed firm. Westpac and ANZ hit record highs after February trading updates, while NAB also reached a record after first-quarter cash earnings rose 16%; taken together, that suggests investors are still willing to back lenders over more cyclical names as the rate outlook gets murkier. 5
But the trade is not clean. Higher rates can cool borrowing and squeeze households, Bullock has warned an extended energy shock could weigh on demand even as it feeds inflation, and Reuters stock data shows CBA still carries an Underperform consensus rating from 14 analysts as of March 5, a reminder that valuation worries have not gone away. 6
Tuesday’s RBA decision is the next test. Beyond that, CBA’s interim dividend is due on March 30. If policymakers lift rates again, investors will look for any hint that May is live as well; if they stay put, some of the rate-driven support that helped push CBA back to A$175.53 could unwind quickly. 2
