The S&P/ASX200 rose 7.9 points on Wednesday, up 0.09 per cent, to 8,978.7, as the broader All Ordinaries lifted 16 points, or 0.17 per cent, to 9,181.1.
The top 200 reached as high as 8,960.6 during the session, but sluggish performances from the big four banks, mega miners BHP and Rio Tinto, and Wesfarmers dragged on the bourse.
The retreat came despite optimism the Middle East conflict could soon end, as the International Monetary Fund warned the resulting energy shock could leave Australia with one of the highest inflation rates in the developed world.
The IMF also projecting national economic growth could plunge to 1.7 per cent in 2027 from 2.6 per cent in 2025.
Broadly though, traders were positioning for good news in the coming days and weeks.
"The key to all of this is we have had the market start to price-in the ultimate de-escalation, or the end to this conflict," IG market analyst Tony Sycamore said.
"That probably means for crude oil, that we settle somewhere in a level around $US85 to $US75 a barrel … consolidating at a higher level until this supply disruption starts to work its way through the system."
Virgin Australia shares soared more than seven per cent after the airline maintained its 2026 guidance, thanks in part to its fuel-hedging program, as it flagged fewer services and higher airfares to soften the blow from sky-high jet fuel prices.
ASX-listed energy stocks tumbled almost two per cent as oil and gas giants Woodside and Santos, along with coal producers, lost ground.
Uranium stocks improved on the brighter outlook for the global economy, with Paladin Energy charging more than four per cent higher, although Boss Energy crumbled by more than nine per cent after disruptions weighed on production guidance.
Gold miners helped lift the heavyweight raw materials sector, which gained 0.7 per cent as the precious metal held its ground above $US4,813 ($A6,741) an ounce.
Evolution shone particularly brightly, up more than nine per cent and beating out the S&PASX200 after swinging its cash position $42 million into the black from a $362 debt in the previous quarter.
Banks weighed on the financial sector, with Westpac leading its big four competitors lower with a 1.9 per cent dive to $40.69, a day after flagging an earnings impact due to the energy crisis.
Investment management firms, Macquarie and major insurers were broadly positive.
IT stocks rebounded 2.4 per cent after months of selling, but the segment is still down more than 45 per cent from September's record highs.
The health care segment was also strong, helped by a nearly eight per cent boost in Mesoblast after it secured an exclusive global license to a patented chimeric antigen receptor (CAR) technology to bolster its existing medicines.
In other company news, Nufarm shares jumped more 11 per cent after foreshadowing a 17 per cent lift in first-half earnings to $244 million.
The Australian dollar is buying 71.38 US cents, up from 70.96 US cents on Tuesday at 5pm AEST.
ON THE ASX:
* The S&P/ASX200 gained 7.9 points, or 0.09 per cent, to 8,978.7.
* The broader All Ordinaries 16 points, or 0.17 per cent, to 9,181.1.
One Australian dollar trades for:
* 71.38 US cents, from 70.96 US cents at 5pm AEDT on Tuesday.
* 113.49 Japanese yen, from 112.86 Japanese yen.
* 60.56 euro cents, from 60.20 euro cents.
* 52.63 British pence, from 52.45 British pence.
* 120.97 NZ cents, from 120.59 NZ cents.
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