ASX 200 Rises 0.4% to 8,843 as Banks and Defensive Stocks Lift Market While Challenger Jumps on Takeover Bid

SYDNEY — Australian shares rose for a second straight session on Monday, shrugging off a weak lead from Wall Street as banks and defensive stocks offset another sell-off in technology shares, while annuities provider Challenger surged on a takeover proposal.

The S&P/ASX 200 index was up 37 points, or 0.42%, at 8,843.7 during the closing auction, after touching an intraday high of 8,849.9. The gain lifted the benchmark back above its 200-day moving average, a closely watched technical indicator.

The rise extended Friday's strong rally, when the index climbed 1% to 8,806.7 in its best one-day performance since early August. The ASX 200 posted its third consecutive weekly gain last week.

Defensive sectors lead

Gains were concentrated in defensive parts of the market, including utilities, industrials, consumer staples and banks, which attracted buying as investors sought shelter from volatility in global technology stocks, according to Market Index.

Energy and financial stocks also rose, while gold miners and technology shares weighed on the market.

The strength in banks was notable after financial stocks lagged during Friday's rally.

Tech stocks stumble again

Technology shares came under renewed pressure after a sharp sell-off on Wall Street on Friday, when the Nasdaq composite fell 2.1% and the S&P 500 dropped about 1.1%.

The S&P/ASX 200 Information Technology index was down about 2.5% by late morning, Market Index reported, giving back some of Friday's 5.6% surge.

Global technology stocks have been volatile in recent weeks amid concerns about heavy spending on artificial intelligence and debt-funded data center expansion. Some analysts have pointed to hedge fund deleveraging as a factor behind the selling pressure in AI-related shares, according to FNArena.

Challenger soars on takeover approach

Challenger was among the day's top performers after the company received a non-binding takeover proposal of $11.80 a share from its major shareholder, Japan's Dai-ichi Life.

The offer represents a 19.8% premium to Challenger's last closing price of $9.85, Market Index reported.

Dai-ichi Life has been a strategic partner and significant shareholder in Challenger for several years. The proposal, if it proceeds, would be subject to due diligence, board recommendation and shareholder and regulatory approvals.

Oil prices in focus

Energy stocks were supported by elevated oil prices. On Friday, Brent crude jumped 3.7% to $109.86 a barrel and West Texas Intermediate crude rose 3.5% to $101.41, according to Bloomberg, driven by increased attacks on shipping in the Strait of Hormuz and reports that Ukraine had vowed to strike Russian refineries.

However, oil price gains were tempered after Iran said Sunday that its offer to reopen the Strait of Hormuz within days remains on the table, raising hopes for easing supply disruptions.

Shares of major producers such as Woodside Energy and Santos were watched closely by investors amid the volatility in crude markets.

Gold miners lag

Gold mining stocks were weaker, partly reversing recent gains. Gold miners had rallied strongly late last week as bullion prices recovered.

China data

Investors also monitored economic data from China, Australia's largest trading partner. Figures released Monday showed the slump in Chinese home prices eased in September, according to Market Index, offering tentative signs of stabilization in the country's struggling property sector.

China's property market is closely watched by Australian investors because of its influence on demand for iron ore and other commodities.

Regional markets mixed

Asian markets were mixed on Monday. Japan's Nikkei 225 fell about 1.2%, while Taiwan's main index dropped about 1.7%, weighed down by technology stocks. China's Shanghai Composite edged higher.

Interest rate outlook

Investors continue to weigh the outlook for interest rates in Australia after weak September employment data last week cooled expectations of a further rate increase by the Reserve Bank of Australia.

Lower rate-hike expectations have helped support interest-sensitive sectors, including banks and property stocks.

Year to date

Including Monday's gain, the ASX 200 has risen modestly so far in 2026, after being buffeted by global volatility, high energy prices linked to the Middle East conflict and uncertainty over interest rates.

Investors will focus on upcoming corporate updates, including quarterly production reports from miners and annual general meetings, as well as developments in global technology stocks and oil markets.

Traders will also watch for further details on Challenger's takeover proposal and any response from the company's board.