Views of ASX200 making new highs in 2026

Hi James,

A well-timed question with plenty of headwinds facing the ASX compared to say US indices. We’ve discussed at length through April/May the obvious negative factors facing the ASX such as interest rates, productivity, an uncertain budget, but we believe a few factors will more than offset these over the coming year:

• Liquidity remains elevated and that money needs to go somewhere, and while we are unlikely to attract the funds that’s pouring into the US, and specifically the “AI buildout Trade”, we will get some with copper a knock-on beneficiary of the AI buildout.
• We believe that the influential resources sector will continue to perform strongly through 2026 with the likes of BHP and RIO at/close to new all-time highs.
• The pullback in the markets most influential sector, the banks, feels like it’s mature, or finished, which will also help the ASX200.
• Valuation contraction has been aggressive in many pockets of the ASX200 and while we don’t expect this to reverse fully, it should bounce back as “Risk” comes back into fashion assuming the Iranian situation gets sorted.
• We also feel that it’s as “bad as it gets” into terms of interest rate expectations which should eventually help the underperforming real estate and retail stocks.

Importantly we believe the advance will be concentrated in a few sectors, but the index was trading less than 4% below its all-time high on Thursday morning, hence, it’s not a big call to target new highs.

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ASX200 Index

LAST UPDATED 07/05/2026 10:27

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ASX200 Index

LAST UPDATED 07/05/2026 10:27