The Morning Bull - Australian Market Morning Update Monday, 26 Oct 2026
The Australian sharemarket is set for a flat to slightly softer open, with sentiment dominated by China's Fifth Plenum beginning in Beijing. SPI 200 futures are marginally in the red, pointing to a cautious start rather than a broad risk-off move.
The Fifth Plenum sets China's medium term policy priorities ahead of next year's leadership reshuffle, including how firmly Beijing leans on discipline and growth. At the same time, FTSE China A50 futures are only fractionally higher, which keeps expectations for any near term policy surprise firmly in check.
For Australian investors, that China policy backdrop feeds directly into expectations for commodity demand, trade volumes and the A$ path. If Beijing signals tighter control on credit or local government spending, markets usually factor in softer export pricing power and more fragile earnings assumptions for businesses that are more exposed to resources.
The unresolved question is whether this Plenum leans more toward reform and growth support or tighter discipline and risk control. Until concrete policy language appears from Beijing, investors are effectively deciding how much China exposure they want to carry into Wednesday's Australian inflation print.
Stocks to Watch Before the Opening Bell
Ingenia Communities Group (INA)
Ingenia Communities Group has become an M&A focal point after receiving an unsolicited, non binding proposal from AVID at A$5.35 a stapled security, plus up to A$0.05 in permitted distribution. The indicative scheme still needs due diligence, board backing, securityholder support and FIRB and ACCC approvals. Watch how the AVID bid interacts with the existing Peet agreement over the next six weeks.
Electro Optic Systems Holdings (EOS)
Electro Optic Systems flagged an order book above A$1.4b, supported by a conditional Kuwait deal for a nationwide counterdrone system worth about £370m. A letter of intent from the Netherlands Ministry of Defence for Apollo High Energy Laser Weapon technology broadens that pipeline. Investors will focus on how quickly conditional contracts convert to firm revenue and the timing of cash receipts.
Evolution Mining (EVN)
Evolution Mining moved a step closer to expanding its footprint after Carnaby Resources shareholders backed the proposed scheme of arrangement. Between 89.22% of shareholders present and 95.42% of votes cast supported the deal. Final court approval is slated for 29 October, with implementation milestones through early November. Timely court sign off and integration progress now sit in the spotlight.
Top Movers
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Zip Co (ASX:ZIP)jumped 10.96% after expanding its in store Best Buy partnership across the United States.
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Eagers Automotive (ASX:APE)climbed 7.75% after agreeing to acquire the remaining 20% interest in its BYD retail venture.
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Minerals 260 (ASX:MI6)gained 7.58% following completion of a follow on equity offering of new ordinary shares.
Top Losers
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Brightstar Resources (ASX:BTR)Brightstar Resources declined 15.67%.
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Chrysos (ASX:C79)Chrysos fell 4.20%.
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Cochlear (ASX:COH)Cochlear declined 3.40% after FY26 AGM commentary highlighting challenging conditions and profit outcomes in line with revised guidance.
On The Radar
Australian inflation in the middle of the week and a heavy run of local quarterly updates put pricing power and rate expectations under the microscope for ASX investors.
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Australia CPI Sep quarterWed 28 Oct. Headline inflation is forecast at 4.2% year on year versus 4.0% previously, so a result above that mark would likely harden rate expectations and lend support to the A$, especially against the US$.
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RBA trimmed mean CPIWed 28 Oct. Core inflation is forecast to hold near 3.6% year on year and 0.3% month on month, and any upside surprise would focus attention on borrowing costs for rate sensitive areas such as housing and discretionary retailers.
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RBA Senate appearanceWed 28 Oct. The hearing gives Canberra a chance to quiz the central bank on how it reads the inflation path and labour market, which can influence expectations for how long mortgage rates stay at current levels.
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FortescueWed 28 Oct. The annual general meeting in Perth arrives while China's Fifth Plenum and upcoming manufacturing PMIs keep attention on iron ore and decarbonisation plans that matter for this exporter and the broader resources sector.
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Federal Reserve rate decisionThu 29 Oct. Markets expect the funds rate to stay near 4.0%, so any shift in guidance around future moves would feed directly into the US$, with flow on effects for the A$ and global risk appetite.
Sector & Industry Watch
Financials: Banks riding rate reset hopes
Financials have pushed ahead over the past week, with Banks rising even more on a 7 day view while 1 year returns are still close to flat. Stronger lenders help many local portfolios because the big four often sit among the largest holdings and pay a large share of total dividends on the ASX.
The single dial to watch is Wednesday's Australia CPI and trimmed mean CPI result. That print feeds directly into RBA rate expectations, which shapes how investors think about bank earnings power and the risk of higher bad debts on home loans.
Consumer Discretionary: Rate sensitive retailers edge higher
Consumer Discretionary has climbed over the past week and month, although returns over the year to date remain weaker. Furniture, auto and leisure spending tends to respond quickly when borrowing costs or confidence shift, so even a small bounce can change how diversified portfolios behave.
For anyone holding retailers or auto related stocks, the key near term signal is Australia's CPI breakdown on Wednesday. The focus is on how housing and services costs affect household budgets, because that influences how much is left for non essential purchases.
Materials and Metals and Mining: Miners under pressure despite project news
Materials and the related Metals and Mining group have both dropped over the past week and month, even though 1 year returns stay slightly positive. That pullback lands at the same time as a flood of project updates, from Wildcat Resources' lithium feasibility work to new gold and rare earth studies, which shows how sector level moves can swamp single company headlines.
If you own resource exposure, the swing factor now is Australia's quarterly CPI and core CPI on Wednesday. Those numbers influence rate expectations, discount rates and risk appetite for long life projects, which all flow through to how investors value future cash flows from iron ore, gold and battery metal producers.
Real Estate: A REITs stabilising as deals return
Real Estate has inched higher over the past week and month while still clearly down on a year to date and 1 year view. The recent bid for Ingenia Communities and capital updates from smaller property groups suggest investors are again willing to fund selected deals even while borrowing costs remain elevated.
For A REIT holders, the crucial domestic cue is the Australia CPI and trimmed mean CPI release on Wednesday. Any surprise on core inflation will steer expectations for how long rates stay restrictive, which matters for refinancing margins and how sustainable current distribution levels look.
Tech: Local growth names still under pressure
Tech remains one of the weakest parts of the AU Market, with returns down heavily over the past year and a further decline over 7 days. Recent quarterly updates from stocks such as Dubber, Pureprofile and Adveritas show revenue and customer growth in places, yet the sector level move reminds investors that higher rates can still weigh on valuations.
If your portfolio tilts toward growth heavy Tech, the key external event this week is the Fed Interest Rate Decision on Wednesday night Australian time. Any change in how the Fed talks about inflation and policy can move long dated bond yields, which directly affects how investors price future earnings for Australian software and AI exposed companies.
Don't Just Read The News, Use It
With Wednesday's Australia CPI set to steer rate expectations and pressure rate sensitive sectors, you can line up sturdier holdings using this list of 6 resilient stocks with low risk scores .
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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