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First Up

UPDATED 28/07/2026 09:37

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The ASX 200 surged +1.4% higher on Monday, delivering its best day in 6 weeks with 85% of the main board closing in positive territory. Only the energy sector closed lower as Middle East tensions eased, sending oil plunging ~9% and global bonds and equities rallied in a classic “risk-on session” for stocks. Ironically, as we head into the uncertainty of Wednesday’s Australian Inflation read, it was the sharp reversal higher in bonds (yields lower) following oil’s weakness that helped drive rate-sensitive stocks up on Monday, with Tech (+4.5%), Materials (+2.4%), and Real Estate (+1.7%).

Yesterday’s trading felt to us like some book-squaring was taking place ahead of next month’s reporting, with some of this year’s worst-performing stocks dominating the winners enclosure:

Software stocks: WiseTech Global (ASX: WTC) +7%, Xero Ltd (ASX: XRO) +6%, Technology One (ASX: TNE) +5.8%, and Life360 Inc (ASX: 360) +5.5%.
Golds: Capricorn Metals (ASX: CMM) +15.1%, Bellevue Gold (ASX: BGL) +9.1%, Predictive Discovery (ASX: PDI) 7.1%, and Ora Banda Mining (ASX: OBM) +6.7%.

Equities continue to be heavily influenced by the oil price, which by definition means their short-term direction is in the hands of President Trump and Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, making it easy to comprehend why many investors are finding it hard to fathom why most major indices are knocking on the door of all-time highs. However, with the US earnings season delivering the best scorecard in 5-years and there still appearing to be plenty of appetite to buy dips, we see no reason to abandon our bullish stance, although it’s needed plenty of patience through 2026.

Overseas markets were mixed overnight with a few big stocks weighing on US indices. In Europe, the German DAX closed up +1.0% while the UK FTSE lagged, ending the session up +0.4%. In the US, the Dow closed up +0.5% while the tech-based NASDAQ retreated by -0.3% as AI spending fears weighed on sentiment and concerns around China competition hit some of the chipmakers.