Market Update - Month Overview (August 2026)

Summarised by Shara Cox (Report via Zenith)

Australian Market Summary

Australian shares rose in August but underperformed global markets, reflecting ongoing weakness in the major banking sector as housing credit growth slowed and concerns around bad debts increased. Health care, materials and gold-related stocks led gains, while small and mid-cap companies outperformed the broader market. Inflation eased modestly during the month, although underlying inflation remained stubbornly high, prompting the Reserve Bank of Australia to maintain the cash rate at 4.35%. Meanwhile, housing market conditions continued to soften, with dwelling prices declining from their earlier peak and new mortgage activity slowing. Australian listed property was the weakest-performing asset class as rising bond yields pressured valuations, while the Australian dollar strengthened against the US dollar, supported by firmer commodity prices and improved investor sentiment.

International Markets:

Global share markets rebounded strongly in August as investors returned to technology and artificial intelligence stocks that had been heavily sold off in July. The recovery was supported by a second consecutive month of softer-than-expected US inflation and the strongest US corporate earnings season in five years, with S&P 500 companies delivering annual earnings growth of more than 50%. Emerging markets also posted solid gains, driven largely by North Asian semiconductor and technology stocks, while a weaker US dollar and improving global economic conditions provided additional support. Despite stronger equity markets, listed property and infrastructure sectors struggled as higher long-term bond yields weighed on rate-sensitive assets. Commodities performed well, particularly gold, which surged 10% during the month.