S&P/ASX 200 bounces back to strong daily gains as Australian shares turn positive with optimism around inflation and Middle East conflict

Australian shares closed nearly 2% higher on Wednesday (March 25, 2026) after softer-than-expected inflation data lifted sentiment, while optimism around a potential Middle East ceasefire further supported gains.

The S&P/ASX 200 closed up sharply Wednesday, gaining 154.90 points or 1.85% to 8,534.30. Its strongest daily gain ‌since February ⁠9, 2026. The top-performing stocks in this index were DRONESHIELD LIMITED and SILEX SYSTEMS LIMITED, up 19.33% and 13.50%, respectively. Over the last five days, the index has lost 1.23% and 2.07% year to date.

Data showed ⁠that consumer prices were unchanged in February, nudging the annual pace of inflation down to 3.7%, from 3.8% in the previous month.

S&P/ASX 200: Top gainers and losers

The S&P/ASX 200 recorded notable movements, with several stocks posting strong gains. DroneShield Limited (DRO) led the top five gainers, closing at 4.260, up 0.690 or 19.327 per cent. Silex Systems Limited (SLX) followed, ending at 5.550 after rising 0.660, marking a 13.496 per cent increase. Vulcan Energy Resources Limited (VUL) also performed strongly, finishing at 3.290, up 0.350, or 11.904 per cent. Liontown Limited (LTR) climbed to 1.730, gaining 0.180 or 11.612 per cent, while Bellevue Gold Limited (BGL) rounded out the top gainers at 1.405, up 0.140 or 11.067 per cent.

On the downside, Karoon Energy Ltd (KAR) led the declines, closing at 1.910, down 0.150 or 7.282 per cent. Beach Energy Limited (BPT) slipped to 1.250, falling 0.070 or 5.303 per cent. New Hope Corporation Limited (NHC) ended at 5.550, down 0.290 or 4.966 per cent, while Endeavour Group Limited (EDV) dropped to 3.430, declining 0.170 or 4.723 per cent. Whitehaven Coal Limited (WHC) also recorded losses, finishing at 8.880, down 0.430, or 4.619 per cent.

S&P/ASX 200: Top-performing sectors

Eight of 11 sectors ended higher along with the S&P/ASX 200 Index. Materials was the best-performing sector, gaining +4.41% and rebounding from its recent decline. This sector is off -1.85% for the past five days. Markets ‌now imply a near 50% chance that the Reserve Bank of Australia will lift its 4.1% cash rate at its ⁠next meeting on May 5, 2026, and could take rates as high as 4.75% by year-end.

Oil prices fell around 4% on Wednesday. Energy stocks closed 2.3% lower, with Woodside Energy and Santos sliding ‌3.2% and 2.3%, respectively. Gold stocks advanced 8.2% after bullion rose more than 2%. Northern Star Resources and Evolution Mining ended 7% and 8.5% higher, respectively.

Miners climbed 4.6%. ⁠Rio Tinto gained 1.6% after Australia unveiled A$2 billion ($1.39 billion) over 10 years to support the miner's Boyne Smelters, the country's second-largest aluminium smelter, to stay open. Financials ended up 1.3%, with three of the "Big Four" banks advancing between 0.6% and 1.7%, and National Australia Bank ending flat. Technology, healthcare and real estate stocks each ended over 1.4% higher.