Woolworths Shares Jump 4% to Five-Year High as Investors Seek Defensive Stocks Amid Global Market Turmoil

SYDNEY — Shares of Woolworths Group rose more than 4% on Thursday to their highest level in five years, as investors sought out defensive stocks during a volatile session for global markets.

Woolworths shares closed up 1.69 Australian dollars, or 4.27%, at 41.28 dollars. The stock reached an intraday high of 41.41 dollars after touching a low of 39.965 dollars earlier in the session.

It was the first close above 41 dollars for Australia's largest supermarket operator since 2021, after several failed attempts to break through that level in recent months. Trading volume was heavy, at about 4.5 million shares, more than 2.5 times the stock's average.

The company has a market value of about 50 billion dollars.

Safe haven in a stormy market

The rally came as global markets were hit by heavy selling. South Korea's Kospi plunged more than 7% and triggered a circuit breaker as chip stocks collapsed, after U.S. inflation data came in hotter than expected and doubts about the artificial intelligence spending boom weighed on technology shares.

Investors often turn to consumer staples companies such as supermarket operators during periods of uncertainty because demand for groceries tends to remain steady regardless of economic conditions.

Woolworths did not release any company-specific news on Thursday.

Weaker-than-expected Australian employment data released during the session also reduced expectations of further interest rate increases by the Reserve Bank of Australia, which helped lift sentiment toward domestic consumer-focused stocks.

Strong year for the stock

Thursday's gain extends a strong run for Woolworths, whose shares are up about 58% over the past year. The stock has risen more than 7% over the past week alone.

The rally reflects a recovery after a difficult period for the company, when it lost market share and faced criticism over pricing during a cost-of-living squeeze for Australian households.

Solid full-year results

In August, Woolworths reported a solid set of full-year results. Group sales for fiscal 2026 rose 3.6% to 71.5 billion dollars, while net profit after tax before significant items increased 15.4% to 1.599 billion dollars, helped by lower interest costs.

Group earnings before interest and tax before significant items rose 12.7% to 3.1 billion dollars. Sales in the core Australian Food division increased 4.6% to 53.9 billion dollars, with earnings in that division rising 8.5%.

The company said growth was driven by investments in value for customers, digital innovation and cost discipline. It achieved about 400 million dollars in above-store cost savings, meeting its target.

Woolworths shares rose about 4% on the day of the results.

Valuation questions

Not all analysts are convinced the rally can continue. Steven Springford of Catapult Wealth has maintained a sell rating on the stock, arguing that the company's recovery is already reflected in its share price rather than representing a new phase of growth.

Technical analysts noted that the stock is trading above its upper Bollinger band, a sign of strong momentum but also a potential signal of short-term overextension.

Competitive landscape

Woolworths competes with Coles Group, Aldi and other retailers in Australia's highly concentrated grocery market. The sector has faced scrutiny from regulators and politicians over pricing practices.

The company has focused on value pricing, expanding its online grocery business and improving its loyalty program to win back shoppers.

Woolworths is expected to report its first-quarter sales for fiscal 2027 in late October, which will offer an update on trading conditions and whether the company's momentum continues.

Investors will be watching for signs of sustained sales growth and margin improvement amid continuing cost inflation and economic pressures on consumers.