Daily Market Update: 18 March 2026

ASX (ASX:XJO) rises after RBA hikes rates in split decision; banks rally, tech and retail slide

The Australian sharemarket climbed on Tuesday after the Reserve Bank raised interest rates by 25 basis points in a split 5-4 decision, suggesting borrowing costs may not climb as aggressively as some had feared. The S&P/ASX 200 rose 30.9 points, or 0.4 per cent, to 8,614.3 – the benchmark was flat for much of the session before rallying on the decision, with traders now pricing in two rate rises by Christmas, down from three before the announcement. The RBA warned that domestic inflation could be worsened by the Iran conflict, with governor Michele Bullock noting that any government energy subsidies in response to the oil shock would distort headline inflation – though the bank remains focused on underlying measures. Banks were all higher as the hike boosts net interest margins – NAB (ASX:NAB), the first to pass on the increase, added 0.9 per cent and Westpac (ASX:WBC) rose 1.4 per cent. Materials rebounded from Monday’s heavy selling as iron ore futures climbed 1.2 per cent to US$108.75 – BHP (ASX:BHP) rallied 1.1 per cent and Fortescue (ASX:FMG) 1.3 per cent. Gold miners surged after UBS expanded its Australian gold coverage with five new buy ratings – Pantoro Gold (ASX:PNR) jumped 12 per cent, Ora Banda Mining (ASX:OBM) 9.1 per cent, Catalyst Metals (ASX:CYL) 7.6 per cent and Westgold (ASX:WGX) 4.9 per cent. Energy was more mixed despite Brent climbing 2.7 per cent to US$102.91 – Santos (ASX:STO) edged up 0.3 per cent while Woodside (ASX:WDS) slipped 0.7 per cent. New Hope (ASX:NHC) lost 6.4 per cent after half-year net profit of $54.3 million came in well below the $80 million expected. Rate-sensitive stocks finished in the red – WiseTech (ASX:WTC) dropped 3 per cent, Xero (ASX:XRO) 1.7 per cent and Wesfarmers (ASX:WES) 1.6 per cent.

Electro Optic Systems (ASX:EOS) plunges 17% on CEO share sale; Pepper Money (ASX:PPM) dives as Challenger lowers bid

In company news, Electro Optic Systems (ASX:EOS) plunged 17 per cent after revealing its chief executive Andreas Schwer planned to sell up to 2.5 million shares to fund a family home and divorce settlement. Pepper Money (ASX:PPM) dived 14.9 per cent after Challenger (ASX:CGF) lowered its takeover offer from $2.60 to $2.25, citing deteriorating market conditions – Challenger rose 3.5 per cent. West African Resources (ASX:WAF) climbed 5.8 per cent after reporting a net profit of $567 million for 2025 on revenue of $1.54 billion. PEXA Group (ASX:PXA) added 1.5 per cent after agreeing to divest its Informed Decisions (.id) business to an unlisted buyer.

Wall Street edges higher as traders look through oil shock ahead of Fed decision

Wall Street staged a cautious advance on Tuesday as investors tried to look past the Iran conflict’s impact on energy markets, with the Nasdaq up 0.5 per cent, the S&P 500 gaining 0.3 per cent and the Dow edging up 0.1 per cent. US crude eased from session highs but still settled above US$96 a barrel, as the near-shutdown of the Strait of Hormuz continued to wreak havoc on energy markets. Airlines jumped after some executives cited strong bookings as travellers rush to lock in fares ahead of expected fuel cost increases. Bond yields and the dollar fell ahead of Wednesday’s Federal Reserve decision, where officials are widely expected to hold rates steady – all eyes will be on whether the Fed strikes a more hawkish or dovish tone given the war’s competing impacts on inflation and growth. Barclays flagged that its equity timing indicator has dropped to its lowest level since the April tariff turmoil, a threshold that has historically marked attractive entry points. In corporate news, Nvidia (NYSE:NVDA) CEO Jensen Huang said the company is firing up manufacturing of H200 AI accelerators for Chinese customers, Qualcomm (NYSE:QCOM) announced a US$20 billion buyback, and Eli Lilly (NYSE:LLY) fell after HSBC turned bearish on the stock, saying investor expectations for weight-loss drugs are overinflated.