The Australian sharemarket rebounded from Monday’s $90 billion wipeout after oil prices fell and US President Donald Trump signalled the Iran war could be ending soon.
The S&P/ASX 200 Index rose 1.1 per cent, or 96.50 points, to 8695.50 at 2.05pm AEDT. The bounce returned $34 billion to the market’s capitalisation after the biggest one-day fall in a year on Monday.
The shift in sentiment followed Trump’s comments in a CBS interview that the conflict was “very complete, pretty much” and the military operation was “very far” ahead of its initial four to five-week timeframe.
Oil prices dropped 10.2 per cent to $US88.85 a barrel, after surging almost 30 per cent on Monday to just below $US120 a barrel. EToro market analyst Josh Gilbert said the current market was being driven by headlines, with a few “calming words” by Trump all it took to reverse heavy selling.
“A single comment from the US president was enough to reverse billions of dollars in losses in a matter of hours,” he said. “Markets are currently treating this oil shock as temporary rather than structural.”
On the ASX, bargain hunters returned, with the materials sector pacing the gains. BHP rose 2.6 per cent as it clawed back a 15 per cent sell-off in the past week, while Mineral Resources surged 5.4 per cent. Gold prices edged up against a weaker US dollar, which in turn saw Northern Star soar 3 per cent and Newmont 2.6 per cent.
Healthcare also outpaced the market as CSL rose 2 per cent as it announced plans to spend $2.1 billion to expand its plasma manufacturing operations in the United States. Pro Medicus gained 6.7 per cent, and Telix Pharmaceuticals was up by 7.9 per cent as it said early-stage results from its global phase 3 trial of TLX591 have been positive.
Energy stocks were sold in a bout of profit-taking after oil prices fell back under $US90 a barrel. Woodside dropped 4.6 per cent, Santos 4.2 per cent and Karoon Energy by 7.2 per cent. The prospect that the conflict could soon end reversed strong gains by coal miners, with Yancoal sliding 2.7 per cent and Whitehaven 1.5 per cent.
Stocks in focus
In corporate news, Fortescue was up 0.5 per cent as it completed its acquisition of Alta Copper, taking full ownership of the Canariaco copper project in northern Peru.
Orica fell 2 per cent as the explosives manufacturer 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 down 1.3 per cent after falling 8 per cent on Monday.