ASX 200 Rebounds on Friday's Close as Geopolitical Hopes Ease Inflation Fears

The S&P/ASX 200 index recorded a significant rebound on Friday, May 29, 2026, rising 1.62% to close at 8,731.70 points. This surge represents the benchmark index's most substantial single-day gain since April 8, 2026, bringing the market to a flat year-to-date performance of +0.04% and securing a monthly gain of approximately 0.8% for May 2026. The strong performance was characterised as a broad-based risk-on rally, predominantly led by robust gains in the mining and banking sectors, following a temporary easing of global geopolitical tensions.

Geopolitical Developments and Resource Sector Surge

The primary catalyst for the market turnaround was the announcement of a tentative agreement between the US government and the Iranian government to extend their ceasefire by 60 days. The potential de-escalation of the three-month conflict raised hopes for the reopening of the crucial Strait of Hormuz. In response, Brent crude oil prices fell by more than 1% on May 29, heading toward a substantial monthly decline of 17-18% for May to stabilise near US$92 a barrel. While the Energy sector finished lower on Friday, declining -0.14% along with Utilities, the broader market reacted positively to the easing of global energy supply concerns.

The Materials sector led the daily gains, climbing 2.89% on the back of stronger base metal prices and a significant rebound in gold, which rose above US$4,500 per ounce after previously hitting a two-month low. This price surge buoyed gold-exposed companies, with Resolute Mining rising +7.98% to $1.285, West African Resources gaining +7.82% to $3.17, and Ora Banda Mining advancing +7.48% to $1.365. Other prominent resource stocks also performed strongly, with Greatland Resources up +6.72% to $13.65 and Perseus Mining increasing +6.38% to $5.17.

Financials and Tech Fuel Broad-Based Rally

Banking stocks also provided strong upward momentum, with the Financials sector increasing by 1.24% on Friday. Commonwealth Bank (CBA) shares rose +2.24% to AUD 165.02. Macquarie Group also posted strong results, reporting a FY26 net profit of AUD 4.847 billion, which represents a 30% increase year-on-year, with international operations contributing 68% of the group's total income.

The market rise extended well beyond commodities and financials, confirming the broad-based nature of the rally. The Information Technology sector rose 1.68%, supported by significant individual stock movements such as 4DMedical, which jumped +18.86% to $3.97, and Electro Optic Systems Holdings, which climbed +16.18% to $11.13. The Industrials sector also finished higher, gaining 1.48%. Supported by the improved risk sentiment, the Australian dollar strengthened to 71.64 US cents on Friday, rising from 71.22 US cents on Thursday.