ASX 200 energy shares outperformed the 10 other market sectors last week, rising 4.25%.
At the other end of the spectrum, tech shares fell 6.61% after inflation data raised the risk of an interest rate hike next week.
The Australian Bureau of Statistics reported that the Consumer Price Index rose by 3.8% in the 12 months to December.
That was an 0.4% increase compared to the 12 months to November.
The inflation data also followed surprisingly strong jobs data in the week prior, which showed that unemployment fell in December.
On Friday, markets were pricing in a 67% chance of a rate rise next week when the Reserve Bank Board meets for the first time this year.
The RBA will announce its decision on rates at 2:30pm on Tuesday.
Mining shares had another big week, with the materials sector up 3.66% by Thursday before a strong pullback on Friday.
Commodity prices continue to run, particularly gold, which went close to US$5,600 per ounce last week.
The S&P/ASX 200 Index (ASX: XJO) rose 0.1% to close at 8,869.1 points on Friday.
Seven of the 11 market sectors finished the week in the green.
Let's review.
Image source: Getty Images
Why did ASX 200 energy shares lead the market last week?
ASX 200 energy shares led the market because of a spike in Brent crude and WTI oil futures, as well as an 18% lift in the uranium price.
On Friday, Brent Crude was US$68.47 per barrel, up 4.6% for the week and up 13.3% in the year to date.
WTI crude was US$64.31 per barrel on Friday, up 6% for the week and up 12.8% in the year to date.
On Friday, Trading Economics analysts said Brent and WTI oil prices were on track for their best month of price growth since July 2023.
Oil prices are being supported by a rising geopolitical risk premium.
The analysts said:
Concerns persist on renewed US–Iran tensions, after US President Donald Trump called on Iran to engage in nuclear talks, while Tehran warned of retaliation.
Market attention is focused on the potential impact of these tensions on shipping through the Strait of Hormuz, a narrow passage between Iran and the Arabian Peninsula that is critical for global energy flows, with tankers transporting crude oil and LNG passing through it daily.
Earlier this month, oil prices were also supported by geopolitical tensions in Venezuela, production outages in Kazakhstan, US production freeze-offs, and tightening US restrictions on purchases of Russian oil, factors that have pushed prices higher so far this year despite expectations of oversupply.
Higher oil prices supported ASX 200 oil shares like Woodside Energy Group Ltd (ASX: WDS), which rose 5.36% to $25.37 on Friday.
The Santos Ltd (ASX: STO) share price soared 8.51% to $7.01.
The Beach Energy Ltd (ASX: BPT) share price lifted 3.36% to $1.23.
Ampol Ltd (ASX: ALD) shares fell 4.82% to $28.84 and Viva Energy Group Ltd (ASX: VEA) lost 13.46% to close at $1.80.
The uranium price ripped 18% over the week to US$101.55 per pound on Friday as market confidence about long-term demand grew.
This lifted the ASX 200's largest uranium share Paladin Energy Ltd (ASX: PDN) 3.98% higher to $13.84 per share.
Paladin Energy shares hit a 52-week high of $14.44 on Friday.
The Deep Yellow Ltd (ASX: DYL) share price ripped 21.27% to close at $2.84 after hitting a 52-week peak of $2.97 on Friday.
Boss Energy Ltd (ASX: BOE) shares increased 4.28% to $1.95.
ASX 200 market sector snapshot
Here's how the 11 market sectors stacked up last week, according to CommSec data.
Over the five trading days:
| S&P/ASX 200 market sector | Change last week |
| Energy (ASX: XEJ) | 4.25% |
| Consumer Staples (ASX: XSJ) | 1.26% |
| Financials (ASX: XFJ) | 0.68% |
| Utilities (ASX: XUJ) | 0.23% |
| Materials (ASX: XMJ) | 0.18% |
| Communication (ASX: XTJ) | 0.18% |
| Healthcare (ASX: XHJ) | 0.11% |
| Industrials (ASX: XNJ) | (0.92%) |
| A-REIT (ASX: XPJ) | (1.08%) |
| Consumer Discretionary (ASX: XDJ) | (1.19%) |
| Information Technology (ASX: XIJ) | (6.61%) |
