It has been somewhat of a stagnant year for the S&P/ASX 200 Index (ASX: XJO).
Global conflict, inflation and high interest rates have all weighed on investor sentiment.
However, on Monday, the ASX 200 jumped 1.4% as investors piled back into the market.
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Is it time to stop being defensive?
Investors have remained defensive throughout much of 2026. Markets have contended with a combination of geopolitical tensions, uncertainty over global trade policy, persistent inflation and shifting expectations for interest rates.
These risks encouraged investors to favour cash, defensive sectors and safe-haven assets over higher-growth equities.
Monday's 1.4% rally, however, could mark an important turning point.
The broad-based advance was driven by easing geopolitical concerns after signs of a US-Iran ceasefire reduced fears of an oil supply shock, sending oil prices lower and improving the outlook for inflation and central bank policy.
With buying spread across technology, banks and major miners rather than concentrated in a handful of stocks, the rally suggested investors were beginning to rotate back into risk assets.
While one strong session does not establish a new trend, it may represent the first sign that markets are shifting from a defensive stance towards a more optimistic outlook, provided geopolitical tensions continue to ease, and economic data remains supportive.
Growth shares are back on the menu
For optimistic investors, this jump could signal the start of a longer-term rally, with several growth shares offering attractive options.
Technology One Ltd (ASX: TNE) shares jumped over 5% yesterday.
It is one of the largest publicly listed software companies in Australia, and still sits 30% below yearly highs.
Technology One was heavily sold off late last year amid sector-wide sell-offs.
However, it is now attracting positive outlooks from experts, and the company expects to grow its annual recurring revenue (ARR) to $1 billion in the next few years.
Another growth share that may pique investor interest is Catapult Sports Ltd (ASX: CAT).
It is a global sports data and analytics company. Catapult provides sporting teams and athletes with detailed, real-time data and analytics to optimise athlete performance, prevent injury, and improve return-to-play.
It jumped over 3% yesterday and is now up 27% over the last month.
Despite the recent rally, it remains down 45% in the last 12 months.
Bell Potter recently retained its buy rating and $4.65 price target on Catapult's shares.
Based on yesterday's closing price, this indicates upside potential of 32%.
