Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
ASX MARKET INSIGHT
Market Overview
The S&P/ASX 200 (XJO) recovered more than half of Monday’s slide on Melbourne Cup Day, adding 30.30 points or 0.34% to finish at 8,886.80, in a session that turned on the Reserve Bank’s 2.30pm decision. The RBA lifted the cash rate by 25 basis points to 4.85%, its fifth increase this year and the highest setting since 2008, but the Board was split 6–3 and its statement dropped the explicit bias toward further tightening, which investors read as a sign the cycle may be close to its peak. A-REIT was the strongest sector at +2.85%, while Energy was the weakest at −3.45% after Brent crude sank more than 7% overnight on hopes of US–Iran talks. Investment platform provider Netwealth Group led the index with a 6.911% gain and Qantas Airways added 6.363% as lower oil eased its fuel bill outlook, while AMP was the heaviest faller for a second day, down 9.362% after a broker downgrade, ahead of salary packaging group Smartgroup (−7.974%). Trading traced a U-shape. The index opened strongly near 8,905, about 49 points above Monday’s close, but that proved to be the high of the day; sellers trimmed it to around 8,881 by 11am and about 8,870 at 11.20am, and after a brief lift to near 8,882 at 12.40pm it slipped below 8,860 just before 1pm. It hovered in an 8,849–8,861 band through the early afternoon and touched the session low near 8,843 at about 2.25pm, minutes before the RBA announcement. The decision sparked a sharp swing: the index jumped to about 8,873, fell back to around 8,853, then climbed steadily to roughly 8,898 shortly after 3pm. It eased to about 8,874 by 3.35pm before buyers returned in the final half hour to carry it to the close. The intraday range was about 62 points, slightly narrower than Monday’s roughly 66, and the close sat in the upper third of the day’s range. The All Ordinaries rose 0.35%, and the ASX notes the S&P/ASX 200 is now up 0.41% over five sessions and 4.41% below its 52-week high, from 4.74% on Monday.
Sector breadth recovered strongly. Seven of the 11 sectors finished higher, up from three on Monday, while four closed lower. A-REIT led at +2.85%, taking its five-day gain to 4.08%, followed by Consumer Discretionary (+1.87%), Telecommunication Services (+1.72%), Consumer Staples (+1.22%), Information Technology (+0.77%), Industrials (+0.67%) and Financial (+0.42%). On the downside, Energy was by far the weakest at −3.45%, with Health Care (−0.58%), Materials (−0.17%) and Utilities (−0.16%) only slightly lower. The best-to-worst spread widened to 6.30 percentage points from 2.15 on Monday, almost entirely because of the energy sell-off. A-REIT jumped from seventh to first as rate-sensitive property stocks responded to the RBA’s softer tone, Consumer Discretionary rose for a third straight day and Telecommunication Services posted a fourth consecutive gain. Consumer Staples snapped a six-session losing streak, Information Technology ended a three-day decline and Financial reversed Monday’s loss. Industrials rose for a fourth day but slipped from first to sixth. Energy fell for a second session and by far more than Monday’s 0.11%, Health Care and Utilities each declined for a second day, and Materials fell for a fourth straight session, though only marginally.
Key Driver:
Market Sentiment / Vibe:
Tuesday opened on a firmer footing as a calmer Wall Street session and a sharp drop in oil eased some of Monday’s nerves, but the market gave back most of its early gain as investors waited on the RBA. In the US on Monday, the S&P 500 slipped 0.51% to 7,541.40 and the Nasdaq fell 1.1% to 25,164.32 as money kept rotating out of technology and AI names after last week’s chip sell-off, while the Dow added 0.41% to 51,983.98. Brent fell 7.63% on hopes of US–Iran peace talks, lifting airline stocks, and the ISM manufacturing index beat expectations at 55.5. After the US close, Apple and Palantir fell on their results, with Apple’s gross margin outlook disappointing. At home, the RBA raised the cash rate by 25 basis points to 4.85% at 2.30pm, as most of the market expected, saying inflation is elevated and broadly based and warning of an increasing risk that higher inflation expectations become embedded. It now expects inflation to stay above 3% over the coming year and not to reach the top of the 2–3% target until late 2027. The vote was 6–3, with three members favouring a hold, and the statement acknowledged that the economy is slowing, home prices have fallen significantly and unemployment has risen. Governor Michele Bullock said the Bank is not looking to tip the economy into recession if it can be avoided. Several economists read the statement as dovish, with UBS and Capital Economics suggesting this could be the last hike of the cycle, while Betashares still expects another rise in February. The Australian dollar eased about 0.3% to near 69.76 US cents after the decision, and Macquarie quickly passed the increase on to borrowers. The mood at the close was relieved rather than euphoric: the index rallied after the announcement and seven of 11 sectors finished higher, led by property and retailers, but the slump in energy, AMP’s second heavy fall and weakness in Westpac and ANZ kept the gain modest, and the index finished below its opening level.
Sector Map | Heatmap
S&P/ASX 200 GICS sector performance at the closing bell. Seven sectors finished higher and four lower — A-REIT was the best at +2.85% and Energy the weakest at −3.45%, a best-to-worst spread of 6.30 percentage points, up from 2.15 on Monday.
The Leaders & Laggards
Top 5 gainers and laggards from the S&P/ASX 200 universe at the closing bell.
Key Events
Commodity & Macro Watch
Data note — The Gold reading in the table above is published from Kapitales Research's own daily closing prices, and the daily move is measured between two consecutive stored closes. Figures for this indicator quoted elsewhere in this commentary are as written at the time of publication and may differ.
The Road Ahead
Our last wrap named 8,860–8,865 as first resistance, followed by 8,870–8,880 and 8,895–8,908, with support at 8,842–8,850, then 8,830–8,835 and 8,800, and said a close above 8,880 would put 8,900 back in play. Tuesday opened inside the 8,895–8,908 zone near 8,905, and that ceiling held: the morning slide took the index back through 8,870–8,880 and, by early afternoon, below 8,860. The 8,842–8,850 support band was tested again just before the RBA decision, with the session low near 8,843 almost matching Monday’s 8,842, and it held for a second day. The post-decision rally then cleared 8,860–8,865 and 8,870–8,880 and stalled near 8,898, just inside the 8,895–8,908 zone. The close at 8,886.80 is above 8,880, meeting the condition we set, so 8,900 is back in play. Resistance now sits at 8,895–8,908, the zone that capped both the open and the 3pm peak, followed by 8,930–8,940. On the downside, 8,870–8,875, where the late-afternoon dip found buyers, is first support, followed by 8,853–8,860 and the twice-tested 8,842–8,850 floor. A close above 8,910 would signal a move toward 8,930–8,940, while a close below 8,842 would open the way toward 8,800.
The RBA cash rate is now 4.85%, and attention shifts from the decision to the guidance. Markets will study the Statement on Monetary Policy forecasts and Governor Bullock’s comments for confirmation that the Board is near the end of its cycle; the 6–3 split and the removal of the tightening bias suggest the bar for another move is rising, but with inflation not expected back near target until late 2027, a further hike early next year cannot be ruled out. Offshore, the US midterm elections are held on Tuesday, and Apple’s soft margin outlook and Palantir’s post-result fall could test technology sentiment again. Oil remains the swing factor for Energy and the airlines: Brent is near US$106 and WTI below US$100 after Monday’s slump, and any progress or setback in US–Iran talks could move both sharply. Gold is near US$3,923/oz and iron ore is steady around US$91 a tonne, still down about 15% for the year. Two threads to carry forward. First, the rate peak: Tuesday showed how much of the market is rate-sensitive, with property, retailers and Telecommunication Services rallying on the RBA’s softer tone. If upcoming data, including the next monthly inflation figures, support the view that 4.85% is the top, that rotation could have further to run, but a hot reading would quickly revive the risk of another hike. Second, oil: Energy’s 3.45% fall shows how quickly a geopolitical shift flows through to local oil and coal names while helping airlines, so headlines from US–Iran talks are likely to keep driving both. Whether the index can close above the 8,895–8,908 zone will show if Tuesday’s recovery has legs or Monday’s failed breakout still holds sway.
Note — All data presented is based on information available at the time of writing.
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