Market Update - Month Overview (March 2026)

Summarised by Shara Cox (Report via Zenith)

Australian Market Summary

Australian markets experienced a sharp downturn in March, with equities falling 7.2% as rising inflation pressures and higher interest rate expectations weighed heavily on sentiment. The RBA increased the cash rate to 4.1% and signalled further tightening ahead, driven by strong employment, persistent capacity constraints and above-target inflation.

Most sectors declined, particularly materials, IT and listed property, as rising bond yields reduced valuations and dampened growth expectations. In contrast, energy, consumer staples and insurance provided some resilience. Australian bonds also fell as yields rose significantly, while the AUD weakened toward month end amid heightened global uncertainty and risk aversion.

International Market Summary

Global markets were dominated by escalating Middle East conflict, which drove a sharp surge in oil prices and triggered a broad risk-off shift across markets. Investors reassessed inflation expectations, leading to a rapid repricing of interest rate outlooks — moving from anticipated rate cuts to the possibility of further tightening, particularly in Europe and the UK.

Global equities declined, with Japan and Europe hardest hit due to their reliance on imported energy, while the US proved more resilient given its stronger growth and energy independence. Emerging markets also fell sharply, impacted by higher oil prices and a stronger US dollar.

Bond markets sold off globally as yields rose in response to inflation concerns, while credit spreads widened. Energy was the standout performer, benefiting from higher oil prices, while most other sectors lagged. Currency markets reflected the risk-off environment, with the US dollar strengthening as a safe haven.