Source : THE AGE NEWS
The Australian sharemarket slumped as gold slid and oil prices spiked after US forces carried out fresh airstrikes on Iran and imposed new sanctions to prevent Tehran from profiting from vessels transiting the Strait of Hormuz.
The S&P/ASX 200 lost 124.80 points, or 1.4 per cent, to 8592.90, as all sectors ended in the red bar consumer stocks. The sell-off, which in mid-afternoon was as much as 1.8 per cent, wiped out the market’s gains from the previous session, when the ASX added 0.7 per cent after lower-than-expected inflation data. The Australian dollar traded at US71.23¢ as the US dollar strengthened.
“Markets are getting itchy feet waiting for this US-Iran deal to materialise,” said Tim Waterer, chief market analyst at KCM Trade. “The latest tit-for-tat strikes feel distinctly incongruous with claims that talks are going well. This stop-start cycle is starting to wear on investor patience.”
A US official said the new attacks were defensive, and America intends to maintain the existing ceasefire. Adding to the tensions, Kuwait said it was responding to hostile missile and drone threats. The nation’s army said in a social media post that “any explosions that may be heard are the result of air defence systems intercepting hostile targets”.
Hours earlier, President Donald Trump said he was “not satisfied” in negotiations with Iran, damping expectations for an imminent breakthrough. The White House also dismissed an Iranian report about a draft interim peace deal that would return Strait of Hormuz traffic to normal within a month as “complete fabrication”. US Secretary of State Marco Rubio said that “we’ll see over the next few hours and days whether progress could be made” on Iran.
Nick Twidale, chief market analyst at AT Global Markets, said that “markets are now reacting to what is clearly an escalation of hostilities in the Gulf. We’ve seen a lot of hope in the market for the last couple of days that negotiations will lead to a deal and that is looking much more distant now.”
Thursday’s losses were led by the heavyweight financial and mining sectors, which combined account for close to 60 per cent of the ASX. The big four banks were all in the red, with CBA down 2.1 per cent, Westpac down 1.3 per cent, National Australia Bank down 1.7 per cent and ANZ down 1.9 per cent.
Gold miners tanked as the precious metal fell to a two-month low as the latest clashes between the US and Iran risked derailing peace talks and kept inflation risks high, weighing on the precious metal. Northern Star Resources plunged 7.2 per cent, Evolution Mining dived 7.8 per cent and Newmont lost 7.2 per cent. South32, which owns Australia’s biggest silver mine, fell 2.5 per cent.Iron ore and copper mining giants BHP and Fortescue Metals both shed 1.2 per cent and Rio Tinto fell 2.5 per cent.
IT stocks also gave back their gains from Wednesday. Software makers Xero (down 2.6 per cent), WiseTech Global (down 1.5 per cent) and Technology One (down 3.1 per cent) were all trading lower after US enterprise software giant Salesforce gave a disappointing sales outlook, unnerving investors already concerned about the possibility that artificial intelligence will disrupt the industry. AI data centre operator NextDC fell 1.5 per cent.
Energy stocks were mixed, but outperformed the wider market as Brent crude climbed almost 3.7 per cent to about $US98 a barrel on the back of the new hostilities, having dropped more than 5 per cent on Wednesday. Oil and gas giants Woodside and Santos were down 0.2 per cent and 0.5 per cent, respectively, while refiners Ampol and Viva Energy were both up 0.5 per cent.
Airlines, which are having to face the jet fuel price shock, also declined, with Qantas down 1.5 per cent and Virgin Australia down 1.1 per cent.
On Wall Street overnight, US stocks ended their session roughly where they started, as investors took profits in tech names but remained optimistic that an end to the war in the Middle East was near.
The S&P 500 Index closed little changed. The tech-heavy Nasdaq 100 Index was down 0.1 per cent, while the Dow Jones Industrial Average advanced 0.4 per cent.
While the choppy session didn’t produce large moves in the S&P 500, “there was a lot of movement beneath the surface,” said Adam Crisafulli, founder of Vital Knowledge. He noted Wednesday’s drop in oil prices weighed on energy stocks and “investors booked profits in certain white-hot tech names,” including Nvidia.
US stocks have been able to run to records despite the painful inflation and uncertainty caused by the high oil prices largely because companies have reported surprisingly strong profits for the start of 2026, and the forecast is for them to continue.
Bath & Body Works rallied 9.7 per cent, and Abercrombie & Fitch climbed 8.9 per cent after both reported bigger profit for the latest quarter than analysts expected. That’s even as US consumers continue to say they’re feeling discouraged about the economy and inflation.
Lululemon Athletica rose 2.9 per cent after reaching a deal with its founder, Chip Wilson, where it will add a former chief marketing officer of ESPN and a former co-CEO of On to its board of directors.
On the losing side of Wall Street was Dick’s Sporting Goods, which dropped 6 per cent despite delivering a profit for the latest quarter that edged past expectations. Analysts pointed to how much profit it wrung out of each dollar in revenue, which some called a bit weak.
In the bond market, Treasury yields eased after falling oil prices took pressure off inflation. The yield on the 10-year Treasury slipped to 4.48 per cent from 4.50 per cent late Tuesday and from 4.67 per cent roughly a week ago.
It’s a respite following recent gains for yields in bond markets worldwide, which threatened to slow economies and undercut prices for stocks and all kinds of other investments. High yields have already forced the average long-term US mortgage rate to its most expensive level since last summer, and they could curtail companies’ borrowing to build the artificial-intelligence data centres that have supported the US economy’s growth recently.
In stock markets abroad, indexes were mixed in Europe.
with AP, Bloomberg
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