• Australian gold stocks in focus after UBS warns of potential FY27 earnings downgrades across the sector

• Gold sub-index up as much as 2% at 16,612.9 earlier in the session, but currently trading higher by 0.5%

• UBS says softer gold prices and rising costs could drive 5%–20% downside to FY27 EPS estimates

• Flags margin compression risk as elevated cost bases likely to persist into FY27

• Recommends shift toward higher-quality, defensive names such as Newmont and Evolution Mining

• Says weaker spot gold prices combined with inflation-driven cost pressures pose near-term headwinds

• Notes market may be underestimating cost and capex pressures, with UBS above consensus on both

• AXGD down 13% so far this year, including the day's moves

(Reporting by Roushni Nair in Bengaluru)