Summary of Australian Stocks Hit Key Resistance at the October Highs

Author: Martin Lam

Date: February 20, 2026

Overview

The Australian stock market, represented by the AUS 200 index, has encountered significant resistance at the 9,114 level, a threshold that previously halted gains in October before a notable correction. This resistance point is critical in determining the future trajectory of the index.

Market Performance

Recent market activity has shown a positive trend, with Australian shares rising due to increased commodity prices that have particularly benefited mining and energy sectors. Additionally, the banking sector has reported strong earnings, contributing to overall market strength.

Commodity Insights

Analyst Michael McCarthy highlighted that there is robust support for metals and mining, driven by constrained supply and underestimated demand. The ongoing growth in energy demand, alongside industrial metals and precious metals, suggests that commodities will remain a focal point for investors, especially in the first half of the year.

Banking Sector Analysis

Despite the Commonwealth Bank's high valuation, all major banks that reported their December earnings or quarterly updates have exceeded analyst expectations. The major mining companies, which constitute about 20% of the AUS 200 index, have experienced a 20% rise since the last record highs in October.

Valuation Concerns

The Australian market is currently viewed as expensive, with the one-year forward price-to-earnings ratio exceeding 18 times, placing the index approximately 27% above its long-term average. This valuation raises questions about the sustainability of the current market levels.

Conclusion

The current resistance level at 9,114 will be a pivotal test for the Australian share market, particularly following a favorable environment in the mining and banking sectors. Investors will be closely monitoring these developments to gauge the market's next steps.

About the Author

Martin Lam is the Chief Analyst for Asia Pacific at ATFX, with over 20 years of experience in global forex and investment markets. He holds a degree in Finance and Economics from Deakin University and has held senior roles at leading FX brokerage firms.