Bourse extends winning streak on energy sector rally

The energy sector propelled the benchmark higher on Monday as fears of a broadening of conflict in the Middle East intensified.

The Australian share market extended its positive run on Monday, notching six consecutive sessions in the green, as energy stocks rose after a re-escalation of tensions in the Middle East.

At the closing bell, the S&P/ASX200 rallied 0.3 per cent, or 23 points, to 7,578.4, while the broader All Ordinaries also added 0.3 per cent to 7,808.3

The Australian dollar was higher, rising 0.2 per cent to US65.90c, against the greenback.

Zoran Krescovic, market analyst at EightCap, said traders were showing signs of a “risk-on” sentiment, with investors seeking higher returns.

“Even those [investors] without the actual risk-on equities, are actually jumping on the bandwagon at the moment,” Mr Krescovic said.

US President Joe Biden vowed on Sunday to strike back after a drone attack he blamed on Iran-backed militant groups killed three US troops in Jordan. Picture: AFP / Kent Nishimura

Energy stocks were the top gainers, rising 1.8 per cent, as Brent crude climbed to almost $US84 a barrel after separate attacks by Iranian-backed Houthi militants killed three US troops stationed in Jordan and a missile struck a Trafigura-operated fuel tanker in the Red Sea.

The attacks have reignited fuel supply concerns and stoked fears that crucial shipping lanes through the Red Sea will be further disrupted.

Woodside Energy rose 2.3 per cent to $31.91, Santos gained 1.7 per cent to $7.80, while Karoon rallied 2.6 per cent to $1.96.

Supporting the sector’s rally was the announcement from the White House on Friday that approvals for new liquefied natural gas projects due to be exported will be paused.

Tech stocks were the biggest laggard on the benchmark, slipping 1.2 per cent, as US tech stocks dipped after sector heavyweight Tesla reported worse than expected earnings.

In company news, Woolworths was unchanged at $36.19 even as it foreshadowed writedowns worth $974.4m in its 2024 interim results as its New Zealand business faced significant headwinds.

Gold Road Resources plunged 18.4 per cent to $1.40, and was the worst performer on the benchmark index, after the miner posted a drop in quarterly gold production alongside a weaker outlook.

China’s debt-laden property sector took a further hit after the country’s biggest property developer was ordered into liquidation. Picture: AFP.

Automotive parts retailer Bapcor jumped 5.9 per cent to $5.58, and it forecast higher half-yearly revenue of $1.02bn, compared with $1bn in the second-half of FY2023.

Boss Energy sank 4.5 per cent to $5.33 after analysts at Bell Potter downgraded the uranium exploration company to a “hold” rating.

In overseas markets, the collapse of Chinese property giant Evergrande, which was ordered into liquidation by a Hong Kong court with $US300bn in liabilities, after it was unable to clinch another deal with creditors.

The company’s shares, which are listed on the Hong Kong stock exchange, tanked 20.9 per cent before trading was suspended.

While the liquidation order risked sending “shockwaves” through the Chinese and global markets, Mr Krescovic said the Australian dollar could still trend higher should Chinese demand for commodities remain robust.

”If we do see more stimulus and this Evergrande case is not contagious … then hopefully we can actually see the “Aussie” bounce back and continue its upside run,” he said.