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The ASX 200 pushed higher on Wednesday, closing up +0.3% despite only 50% of the main board finishing on the positive side of the ledger. It was an unbalanced advance in the local index, but with the materials sector contributing more than 50 points to the main index, it was always likely to be a decent session for the ASX. We’ve remained bullish through thick and thin in 2026, believing the miners would drive the ASX200 well above 9000; perhaps the beast is awakening.
The hostilities are escalating between the US and Iran, with both parties downplaying any prospect of diplomacy as we approach the 150th day of geopolitical uncertainty. Crude oil is taking notice, trading above US$95/barrel overnight, around 35% above this month’s low; however, encouragingly, risk assets are trading as if a resolution is imminent – let’s hope they are correct!
The ASX tech sector (-1.9%) struggled again on Wednesday, extending its 12-month decline to -41% as the “AI Disruption Trade” has proved to be a standout Quant move through 2025/6, both on the ASX and in the US. Certain high-multiple software and services businesses built on charging for complexity are now structurally vulnerable because AI does the same job cheaper, faster, or free. The quant framework is clear: steer clear of expensive, labour-light workflow-automation businesses with slowing growth and no credible AI-native response. The likely survivors will be those that integrate AI quickly enough to protect their competitive moat, but for now the markets are adopting an if in doubt get out approach.
Overseas markets were mixed overnight, with higher oil prices weighing on US equities while a softer-than-expected UK inflation print helped lift stocks in the region. In the US, the Dow closed flat while losses in most megacaps weighed on the S&P 500 (-0.1%), offsetting a rebound in chipmakers that saw Nvidia Corp. +2.3%. In Europe, the UK FTSE climbed +1.2%, leading the German DAX, which finished up +0.6%.
- The SPI futures are calling the ASX200 to open up +72pts/0.8% this morning, keying off strength in Europe and a positive move across commodities, with BHP expected to open up +1.1%.
