The Australian sharemarket rebounded from Monday’s $90 billion wipeout as oil prices retreated after US President Donald Trump signalled the Iran war could be ending soon.
The S&P/ASX 200 Index rose 1.5 per cent, or 130.1 points, to 8729.1 at 10.15am AEDT, with energy the only sector lower. The bounce returned $47 billion to the market’s capitalisation after the biggest one-day fall in a year.
The shift in sentiment followed Trump’s comments in a CBS interview that the conflict is “very complete, pretty much” and the military operation is “very far” ahead of its initial four- to five-week timeframe.
Oil prices fell after surging almost 30 per cent on Monday to just below $US120 a barrel, last trading around $US90.
Capital.com senior market analyst Kyle Rodda said: “The critical issue will be clear evidence that oil is flowing through the Strait of Hormuz, Gulf producers are returning output to normal and key energy infrastructure is secure with minimal risk of further attacks. Until then, supply risks remain and could keep upward pressure on oil prices and volatility across broader markets.”
On the ASX, bargain hunters returned, with technology leading the gains. WiseTech Global rallied 3.6 per cent, NextDC by 3.4 per cent, Life360 by 8.3 per cent and Xero by 2.1 per cent.
Miners also bounced back after heavy selling on Monday. BHP rose 2.4 per cent as it looked claw back a 15 per cent sell-off in the past week, while Rio Tinto added 1.1 per cent. Investors returned to gold miners with Northern Star up 2.5 per cent and Newmont 2.4 per cent.
Energy stocks were sold after oil prices fell back under $US100 per barrel. Woodside dropped 3.1 per cent, Santos 2.8 per cent and Ampol 1.2 per cent. The prospect the conflict could soon end reversed strong gains by coal miners with Yancoal diving 6.4 per cent and Whitehaven by 2.8 per cent.
Stocks in focus
In corporate news, Fortescue rose 2.1 per cent as it completed its acquisition of Alta Copper, taking full ownership of the Cañariaco copper project in northern Peru.
Telix Pharmaceuticals soared 8.5 per cent as it said early-stage results from its global phase 3 trial of TLX591, an experimental treatment for advanced prostate cancer, have been positive.
CSL jumped 2.5 per cent as it announced details of plans to spend $2.1 billion expanding its plasma manufacturing operations in the United States.
Orica edged up 0.7 per cent as it expected first-half earnings to be slightly higher than a year earlier on strong demand. The explosives manufacturer also launched a $100 million cost reduction program over the next three years.
Air New Zealand suspended its full-year earnings guidance after the escalation of conflict in the Middle East sent jet fuel prices soaring. Shares in the loss-making New Zealand carrier were up 1.3 per cent.