SYDNEY, March 12, 2026, 20:08 (AEDT)
Australian shares closed sharply lower on Thursday, with the S&P/ASX 200 ending down 1.3% at 8,629.00, as oil vaulted back above $100 a barrel after attacks on fuel tankers in the Middle East. The fall snapped a two-day rebound and pushed money out of banks and miners, even as energy names outperformed. The Economic Times
The selloff matters because traders are repricing next week’s Reserve Bank of Australia decision after the central bank raised the cash rate to 3.85% in February. The RBA’s next monetary policy meeting is set for March 16–17, and the benchmark index is down more than 6% so far in March, leaving it on track for its worst monthly performance since September 2022. Reserve Bank of Australia
Interest-rate swaps — contracts investors use to read the policy outlook — now imply about a 75% chance of another quarter-point rise, up from roughly 20% before the conflict began. Commonwealth Bank said on Thursday it now expects hikes in March and May, taking the cash rate to 4.35%, while Westpac this week also shifted to call increases at both meetings. Indo Premier
CBA head of Australian economics Belinda Allen said, “The debate at the March meeting will be a close one.” CBA still thinks the RBA will act because inflation remains above target and the economy is running above trend. commbank.com.au
On the board, financials fell 1.5% and miners lost 1.7%. A blue-chip index tracking the big four banks and major iron ore miners dropped 1.2%, while healthcare, technology and real estate shares fell between 1.5% and 3.5%. Energy was the outlier: Yancoal Australia jumped 10.5% to about a nine-year high and Whitehaven Coal rose 6.7%. Indo Premier
Tim Waterer, chief market analyst at KCM Trade, said equities were likely to stay in “risk-off mode” — when investors back away from shares — unless there were positive developments around Iran and the Strait of Hormuz. He said a tighter rate setting could also apply the brakes to growth. The Economic Times
Sydney was hardly alone. MSCI’s Asia-Pacific index outside Japan fell 1.5%, Japan’s Nikkei lost 1.4% and Hong Kong’s Hang Seng dropped 1.2%, while the Australian dollar slipped 0.4% to $0.7122 even as local rate bets firmed, a sign investors were still reaching for safety. Reuters
Fresh domestic data gave the market little comfort. Commonwealth Bank’s Household Spending Insights index fell 0.5% in February, the first monthly drop since September 2024, while annual growth slowed to 4.9%, the weakest pace since August 2025. “Spending has been remarkably resilient over the past year,” Allen said, but a fall after 17 months of growth suggested households may be starting to pull back. commbank.com.au
But the big uncertainty is still oil. The International Energy Agency agreed to release a record 400 million barrels from reserves, yet analysts said that may offer only temporary relief if flows through Hormuz stay disrupted. ING said sustained declines in crude would require oil moving through the strait again. Reuters
For now, traders are staring at March 17, when the RBA is due to publish its next policy decision. After Tuesday’s 1.1% rebound and Wednesday’s 0.6% rise, Thursday’s drop showed how fast sentiment can flip when crude and rate expectations start moving together. Reserve Bank of Australia
