ASX trims losses amid Iran bombing fallout

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket has fallen for a fifth straight session, but managed to recoup some of its morning losses after Iran failed to immediately retaliate against the US bombing of its nuclear facilities.

The S&P/ASX 200 lost 0.4 per cent, or 30.6 points, to 8474.9. Almost every sector finished lower on Monday, with materials, industrials and consumer staples leading the losses. Energy and finance were the only sectors in the green. The broader All Ordinaries finished the day down 35.5 points, or 0.4 per cent, at 8688.

The Australian dollar was buying US64.22¢, down from from US64.76¢, at 5pm on Friday.

All eyes will be on Wall Street tonight. Credit: AP

The lifters

The energy sector finished 0.1 per cent higher to add to a 18.5 per cent increase in the past month. Woodside finished flat, Santos gained 1 per cent and Ampol finished up by 0.5 per cent.

Half of the big four banks finished higher as the sector gained 0.4 per cent overall. Commonwealth Bank, the biggest stock on the bourse, gained 1 per cent and Westpac picked up 0.6 per cent.

Gold miner Newmont closed the day 1 per cent higher as investors look to haven materials amid the escalating conflict in the Middle East.

The laggards

Coalmining giant Yancoal was the only one of the four dominant energy companies to finish lower, losing 2.5 per cent.

Miners also a rough day, with BHP down 1.6 per cent, Fortescue 1 per cent lower, Rio Tinto down 0.3 per cent and Northern Star 3.1 per cent down. Evolution Mining dropped 2.6 per cent.

The industrial sector dipped, with supply chain company Brambles losing 5 per cent, Qantas shedding 1.9 per cent and Auckland International Airport falling 1.4 per cent as airports began diverting flights away from the war zone.

Of the banks that ended the day in the red, the National Australia Bank shed 0.7 per cent and ANZ dropped 0.6 per cent.

The lowdown

The Iran attack deepens US involvement in the Middle East, and investors are considering likely market scenarios, including what it could mean for share prices, the price of oil, and currency and bond markets.

In a major escalation of the conflict in the Middle East, US President Donald Trump on Sunday announced the US had “completely and totally obliterated” Iran’s uranium enrichment facilities, as he warned Iran should “make peace” or face “far greater” future attacks.

“This kind of uncertainty is quickly becoming the new normal for markets, so I expect to see a relative sense of calm unless we see tensions keep rising, which, to be clear, it has the potential to do,” said Josh Gilbert, a market analyst at eToro in Sydney.

“Even without an immediate fallout, the mix of oil volatility and renewed uncertainty is likely to be enough to keep risk appetite subdued.”

The US assault on Iran’s three main nuclear facilities buoyed the US dollar while oil jumped sharply on fears that Tehran could attack Middle East energy infrastructure or shipping in the Strait of Hormuz.

Global oil benchmark Brent was 1 per cent higher at $US77.93 a barrel at 5pm AEST, while West Texas Intermediate added 0.9 per cent to $US74.73 a barrel. Energy stocks advanced. Santos jumped 1.1 per cent and Woodside edged up by 0.1 per cent.

Gold edged lower, reversing an earlier advance, as the world waited for Iran’s response. Bullion traded near $US3355 an ounce after being up as much as 0.8 per cent earlier.

Ben Zala, a senior lecturer in international relations at Monash University in Melbourne, said it was highly likely that Iran would strike back against the US in some way.

“The market in this regard will be very, very reactive to military events in the region – across stocks, bonds, currencies – because we just don’t know the exact way that this is going to play out,” Zala said.

US President Donald Trump speaking from the White House after the US bombed Iran.Credit: AP

The hostilities have given fresh impetus to a rally that has pushed gold up almost 30 per cent so far this year. While the chances of an expanding conflict are, theoretically, supportive for bullion, a sustained rise in energy prices would spur inflation and make Federal Reserve rate cuts less likely, a negative for the metal that doesn’t offer any interest.

“The market’s still not convinced that the US attack on Iran will ultimately lead to a significant rise in geopolitical tensions,” said Daniel Hynes, a senior strategist at ANZ Banking Group.

“That’s why we haven’t see investors flock to haven assets. Any haven demand could be offset by investors concerns that any rise in oil prices could potentially leave the Fed holding rates high amid inflationary concerns.”

Locally, grocery wholesaler Metcash, which operates IGA, and other food, liquor and hardware businesses, rose 3 per cent after revealing an 8.9 per cent rise in group revenue to $17.3 billion. Statutory profit rose 10.1 per cent to $283.3 million, and it has declared a fully franked dividend of 18¢ cents a share for the 2025 financial year.

Homewares retailer Adairs slumped 20.5 per cent after releasing a trading update that showed its record sales of 9 per cent higher than fiscal 2024 was being driven by more promotions. That, combined with a weaker Australian dollar, was “adversely impacting gross margins”, the company said.

With AAP, Reuters, Bloomberg

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