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First Up

UPDATED 29/07/2026 09:36

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The ASX 200 delivered a stellar albeit surprising performance on Tuesday, reversing early losses to close up +0.6%, posting a 6-week high in the process. The buying gathered momentum after lunch ahead of todays pivotal CPI inflation read, with bonds also strong; it felt like some hawks were squaring their positions in case the CPI comes in softer than expected. However, what was most impressive about the performance was the manner in which the local market shrugged off weakness across the region, where the KOSPI (-11%) and Japanese Nikkei (-4%) combined with weak US futures to paint a clouded picture for risk assets.

Tuesday’s gains were not broad-based, with less than 60% of the main board closing higher, with a notable positive bias again to many stocks and sectors that have struggled in 2026, and vice versa, e.g. the consumer discretionary and healthcare sectors both closed up by more than +2% yet over the last 12 months they’ve both struggled despite the market’s +3% gain.

The ASX has underperformed its peers in 2026, but as the semiconductor and AI trade crumbles it’s feeling like some overseas money is returning to our shores, and not being a big market, that can have a major impact on the index. With the miners already well owned by overseas investors, this would explain why the buyers are spreading their wings. Whatever the reason, as the market internals improve into next month’s reporting season, we wouldn’t be short for quids!

The CPI is likely to have a big impact on the ASX200 today, but any sign the RBA won’t hike this year could see the index punch well above 9000 in the blink of an eye.

Overseas indices were broadly higher overnight as Brent Crude dropped another 5%. In Europe, the UK FTSE closed +0.8% higher, closely followed by the French CAC, which ended up +0.6%. In the US, the broad-based S&P 500 closed up 0.2%, weighed down by tech stocks, which ended down 1.0% as chip stocks continued to fall.