Australian shares are still under pressure overall this week from high oil prices, inflation concerns, and expectations of an impending interest rate hike.

Let’s find out how major S&P/ASX 200 Index (ASX: XJO) shares like AGL Energy Ltd (ASX: AGL), Telstra Group Ltd (ASX: TLS), and Zip Co Ltd (ASX: ZIP) are tracking, and which ones brokers rate as a buy, sell, and a hold.

Buy Zip shares

It’s been a volatile ride for Zip shares over the past 12 months, with its shares swinging between a low of $1.38 in March and a high of $4.93 in January.

Most recently, the sell-off picked up pace after the company posted its FY26 results late last month. Zip posted a record result, including a huge 57.9% increase in its cash EBTDA, a 24.7% increase in total revenue, and a 45.7% hike in its NPAT for FY26. 

The announcement was initially well received by investors, who rushed to snap up the BNPL provider’s shares. But gains were quickly reversed, and the shares are now down around 28% since the announcement.

While the result itself was positive, many investors were underwhelmed by the company’s outlook for future growth.

Zip said it is aiming to deliver a group cash EBTDA of $340 million in FY27, up 26% on FY26, and target an operating margin of 20% to 22%. That’s much lower than the 57.9% cash EBTDA growth the company experienced in FY26.

But it looks like brokers are confident that the shares can keep climbing higher over the next 12 months. Market Index data shows all brokers have a strong buy rating on the ASX tech shares. And the $3.95 average target price implies an upside of around 79% at the time of writing.

Sell AGL Energy shares

AGL shares rallied higher in mid-August after the ASX energy stock posted an impressive FY26 result. 

The energy supplier announced a 2% increase in both its underlying EBITDA and underlying NPAT for FY26. It also confirmed a 60% increase in its operating free cash flow. The company said that it has grown its customer base, invested $600 million in firming projects, achieved major milestones – including two long-term power purchase agreements – and completed divestment of its stake in Tilt Renewables.

For FY27, AGL is guiding underlying EBITDA between $1.9 to $2.2 billion and underlying NPAT between $470 to $670 million.

But quickly after the share price spike, many investors rushed to take their gains off the table. 

At the time of writing, the shares are down around 5% over the past month, to $8.33 a piece. AGL shares are now down around 11% for the year to date and 4% lower than a year ago.

There hasn’t been any price-sensitive news out of AGL since its results announcement, so it looks like the latest sell-off is led by lower investor sentiment.

It looks like there are concerns that the company’s earnings recovery is taking longer than expected. 

At the same time, softer power-price expectations, driven by a surge in renewable energy and lower wholesale costs, are expected to put electricity companies like AGL under pressure.

Market Index data shows the majority of brokers have a sell rating on AGL shares. However, after the latest share price decline, the $9.70 target price implies a potential 16% upside.

Hold Telstra shares

Telstra shares have rebounded around 7% from an annual low in late August. The ASX telco shares are now around 0.2% higher year to date but roughly 1% lower than 12 months ago.

The shares tumbled after the telco posted its FY26 results mid-month, with revenue down 0.8% and underlying earnings up 4.4%. However, not long after, investors swooped back in to snap them up at a lower valuation.

As a classic defensive business, Telstra shares are also likely benefiting from a recent flight to security amid renewed geopolitical volatility and inflation concerns.

Brokers aren’t convinced that there is much more room for growth going forward. Market Index data shows the majority have a hold rating on Telstra shares. But the $5.01 average target price implies an upside of around 3% at the time of writing.

The post Buy, hold, sell: AGL Energy, Telstra, Zip shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A new report from Global X has shed light on the tricky market conditions facing investors today. Right now, investors are navigating high valuations and soft expectations in the Australian market. 

Marc Jocum, Senior ETF Strategist at Global X ETFs Australia, reinforced that investors are facing a challenging environment. 

With Australian equities trading near record highs but earnings expectations continuing to soften, as well as economic headwinds, investors may face a more challenging environment. In this backdrop, covered call strategies can offer an alternative way to participate in Australian equities while generating an additional source of income and potentially improving the risk-adjusted profile of a portfolio.

Economic headwinds

According to the report, the August reporting season was one of the most volatile on record. Almost half of the S&P/ASX 200 Index (ASX: XJO) companies moved more than 5% on their earnings day. 

While the ASX 200 reached record highs, the underlying earnings picture was less encouraging. 

Company guidance generally disappointed relative to consensus. Meanwhile, forward earnings per share (EPS) growth expectations have continued to be revised lower.

Against this backdrop, a subdued housing market, persistent inflation, fiscal uncertainty and the prospect of further RBA rate hikes could create additional headwinds for Australian equities. We don’t believe this is a reason to sell Australia. Rather, it highlights the potential value of changing the way investors access the market.

The team at Global X emphasised that a covered call strategy can be a viable option in this economic environment. 

What is a covered call strategy?

Covered call writing is an investment strategy where investors buy a stock, or a group of stocks, and sell call options on them. 

Selling call options on stocks investors already own generates income, without facing riskier margin calls. 

However, it requires investors to forego upside – as a covered call portfolio can be “called away” when markets move higher.

According to Global X, covered call ETFs have become an established part of the income market overseas. Australia appears to be following a similar trajectory. 

There is now close to $5 billion invested in covered call strategies in Australia. This is almost 10 times the level of five years ago.

A covered call strategy provides exposure to a broad basket of shares while systematically selling call options to generate additional income. The trade-off is that some upside is forgone when markets rise strongly, but the option premiums received can provide an additional return stream and a degree of downside cushioning when markets are flat or weaker.

Global X S&P/ASX 200 Covered Call Complex ETF (ASX: AYLD)

For investors looking to utilise this strategy, this ASX ETF could be an option to consider. 

The fund holds the constituents of the ASX 200 Index while selling at-the-money call options on the same index on a quarterly basis. 

It seeks to generate higher income by owning the ASX 200 and systematically selling at-the-money covered call options over the index. 

The strategy currently has a 9.2% trailing 12-month yield (as of August 2026), with option premiums providing an additional source of income alongside dividends and franking credits from the underlying Australian equities.

Importantly, the strategy is not simply about maximising yield. The option overlay can also alter the risk and return characteristics of the underlying equity exposure, historically resulting in lower volatility and a smoother return profile. In 2026, AYLD has outperformed the broader Australian share market by more than 2% to date with less bumps along the way.

The post With high valuations and pesky headwinds, this covered call ASX ETF could be a timely investment appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: AGL Energy, Telstra, Zip shares
• With oil back over $100 USD per barrel, this ASX ETF could be set to benefit
• The Fed just hiked rates for the first time in 3 years. What does it mean for ASX investors?
• This ASX biotech could jump more than 30%, one broker says
•  If I invest $10,000 in CBA shares, how much passive income will I receive in FY27?

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the most influential stories of 2026 has been surging oil prices.

Crude oil has gone past US$107 per barrel this week after Saudi Arabia closed its east-west oil pipeline following a drone attack. 

A new report from VanEck has reinforced that if oil stays near these levels, the consequences will reach much further than the energy sector.

What is going on with oil prices?

Oil prices are elevated in 2026 largely because the conflict in the Middle East has disrupted production and shipping. 

Tight inventories and limited spare capacity have amplified the impact of these disruptions. This is leaving the global market unusually sensitive to further supply shocks.

This has also influenced the RBA’s decision to hike interest rates throughout the year in an attempt to cool inflation. 

According to VanEck, if oil, which is already up more than 76% this year, remains at these levels and trimmed mean inflation stays above 3%, the case for further rate rises will be hard to dismiss. 

A prolonged oil shock could leave a second increase in play, adding pressure to household spending and growth-oriented equity valuations.

Higher oil prices can also support the earnings of energy producers and refiners, creating opportunities for portfolios positioned to benefit.

Where is the upside?

These economic factors have led to a surge in 2026 for ASX energy stocks.

In fact, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 32% year to date. 

According to VanEck, while higher oil prices pose a challenge for the wider economy, investors are exposed to the other side of the story: favourable industry conditions can produce substantial returns.

From the beginning of 2026 to the end of August, global oil refiners returned around 50% and Australian oil refiner Ampol Ltd (ASX: ALD) gained close to 40%. 

International equities returned about 5% over the same period.

These gains do not mean every energy company will benefit to the same extent. However, they do show the size of the opportunity when stronger industry conditions flow through to company earnings.

An ASX ETF to consider

Higher oil prices remain a threat to inflation, interest rates, and household spending. 

But they could also create an earnings tailwind for selected Australian energy companies. 

One ASX ETF that could be a buy in this market is the VanEck Australian Resources ETF (ASX: MVR). 

It provides a strong resources and energy tilt. 

As of August 2026, oil and gas represented 19.2% of the fund. This is much higher compared with 11.4% of the S&P/ASX 200 Resources Index (ASX: XJR).

The structure of the fund also caps each company at 8% at rebalance, preventing one company, such as BHP Group Ltd (ASX: BHP), from dominating the portfolio. 

As a result of the cap, the weight released from BHP is spread across energy producers, gold miners, critical minerals companies, and other parts of the resources sector.

That gives investors more exposure to companies that may benefit from higher oil prices without making the entire allocation dependent on one commodity or company.

Foolish takeaway

Surging oil prices are putting upward pressure on inflation and interest rates, but they are also boosting energy-sector earnings. 

This potentially benefits resource-focused investments such as the VanEck Australian Resources ETF.

The post With oil back over $100 USD per barrel, this ASX ETF could be set to benefit appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: AGL Energy, Telstra, Zip shares
• With high valuations and pesky headwinds, this covered call ASX ETF could be a timely investment
• The Fed just hiked rates for the first time in 3 years. What does it mean for ASX investors?
• This ASX biotech could jump more than 30%, one broker says
•  If I invest $10,000 in CBA shares, how much passive income will I receive in FY27?

Motley Fool contributor Aaron Bell has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.