The Australian share market isn't exactly a calm place to be this week. Honestly, if you’ve been watching the charts, it feels like a tug-of-war between the big banks and the iron ore giants. We’ve seen the S&P/ASX 200 climb to levels we haven't touched in months, hitting an intraday high of 8,915.5 recently. But it’s not all sunshine. The aus share market today is grappling with a shift in momentum that has left a lot of retail investors wondering if they should be taking profits or digging in for a longer ride.
Gold is flirting with $US4,600 an ounce. Copper is hitting fresh highs. If you're holding miners, you’re likely smiling, but the "Big Four" banks are making things complicated.
The Reality of the Aus Share Market Today
The index closed out the most recent session at 8,903.9, up about 0.48%. That sounds small, but it marks the best week the local bourse has seen in over two months. It’s a classic "good news, bad news" situation. The good news? Our materials sector is absolutely on fire. BHP and Rio Tinto have been dragging the rest of the market up by its bootstraps. The bad news? This rally is looking a bit top-heavy. When BHP is nipping at the heels of Commonwealth Bank to become the most valuable company in the country, you know the resource cycle is in overdrive.
What’s Actually Moving Your Money?
It’s easy to get lost in the noise of daily fluctuations. You’ve got to look at the sectors individually to see where the rot or the bloom is.
Mining and Materials
BHP, Rio, and Fortescue are the heavy hitters here. This week, we saw the materials sector reset its record high three sessions in a row. That is unheard of. Analysts like Kyle Rodda from Capital.com have pointed out that while Wall Street is obsessed with AI, Australia is still a "dirt and rocks" story. Copper demand is surging because of the global energy transition, and silver—led by players like South32 with their Hermosa project—is becoming the surprise MVP of 2026.
The Financials Sector
Banks are a different story. Commonwealth Bank (CBA) is trading around $154.34, but it’s been stuck in a tight range for over a week. There’s a bit of a "Trump effect" happening too. Investors are a little spooked by proposed caps on credit card interest rates in the US, and that sentiment often drifts across the Pacific to our local banks. If the banks lose their footing, the aus share market today could easily slip back below that 8,800 support level.
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Why Everyone Is Obsessed With the RBA
Let's talk about interest rates. The Reserve Bank of Australia (RBA) has kept the cash rate at 3.60% for a while now. But if you look at the 30-day Interbank Cash Rate Futures, there is a nagging 25% expectation that we might see a hike to 3.85% in February.
Why? Inflation is being stubborn. While it’s moderated from the crazy peaks of 2022, services inflation—think insurance, rent, and your morning coffee—is still sticky. The RBA minutes from December showed they are ready to pull the trigger if the Q4 CPI data (due late January) comes in hot. Higher rates are generally bad for growth stocks and tech, which is why companies like Xero and Life360 have been under a bit of pressure lately.
Tech and Energy: The Outliers
Tech is a weird one in Australia. We don't have a Google or an Apple. We have companies like Droneshield, which just hit a multi-month high of $4.37. Tech usually follows the Nasdaq, and with Taiwan Semiconductor (TSMC) posting solid results, our local software players got a bit of a "halo effect" this week.
On the flip side, energy is a mess. Crude prices dropped because geopolitical fears in the Middle East eased slightly. Woodside and Santos took a hit because of it. It’s a reminder that the aus share market today is deeply connected to global headlines. You can't just look at what's happening in Sydney or Melbourne; you have to look at Tehran and Washington too.
The Dividend Trap
A lot of people pile into the ASX for dividends. It's the Australian way. But you have to be careful with "special dividends." Take Bluescope Steel—they just announced a $438 million payday for shareholders. While that looks great on paper, you have to ask yourself if that’s a sign of a company with no better way to spend its cash. Sometimes a big dividend is a "thank you and goodbye" to growth.
Actionable Insights for the Week Ahead
The market is currently in a "seasonal strength" window that usually lasts from mid-December to mid-January. We are right at the tail end of that. Here is how to play the current environment:
- Watch the 8,700 Support: If the ASX 200 drops below this level, the technical charts suggest we could see a slide back toward 8,400. This is the "danger zone."
- Keep an Eye on Silver and Copper: These aren't just for speculators anymore. With the Hermosa project expected to start production in 2027, South32 (S32) is shifting from an aluminum play to a silver-zinc play.
- Prepare for CPI Day: The inflation data on January 28 is the most important date on the calendar. If that number is high, expect a massive sell-off in the banks as people price in a rate hike.
- Don't Chase the Record Highs: It’s tempting to jump into BHP when it's at a two-year high, but we’re already seeing "profit-taking" from the big institutional players.
The aus share market today is resilient, but it’s tired. We’ve had four consecutive days of gains, and the "easy money" for the month has probably been made. If you’re looking to enter the market now, maybe wait for a pullback. The volatility in commodities means there will almost certainly be a better entry point in the next fortnight.