ASX Ends Flat as Gold Miners, Oil Stocks Limit Damage
The Australian sharemarket closed at a record high as investors rushed into gold miners and oil stocks after US-Israeli strikes that killed Iran’s supreme leader, Ali Khamenei.
The S&P/ASX 200 Index added 2.3 points to 9200.90 – the fourth consecutive record close – as five of the 11 sectors closed up as investors piled into haven assets including the US dollar and gold. US futures were pointing to heavy selling on Wall Street later today, with major indices down around 1%.
Brent crude was last up 5.8% to $US77.09 a barrel after rising as much as 13% at the open, while gold gained 1.4% to $US5350 an ounce. That came as Iran retaliated with strikes on nearby Gulf countries, including Iraq, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. The conflict disrupted key aviation hubs and has all but stopped oil shipments through the Strait of Hormuz.
EToro market analyst Josh Gilbert said the critical question for investors is how long this disruption might last. “Markets hate uncertainty, and right now, investors are facing one of the most uncertain geopolitical backdrops in years.”
Losses on the ASX were cushioned by the energy sector, which surged by nearly 5% on the higher oil price. Woodside rallied 6.8% to $30.24, Santos 6.7% to $7.21 and Karoon 15.2% to $1.78.
The flight to gold also buoyed the miners. Newmont rocketed 5.7% to $187.22, Resolute Mining 10.4% to $1.64 and Genesis Minerals 8.5% to $8.06.
Counter-drone solutions firm DroneShield surged 6.6% to $3.86, while Qantas dropped 5.4% to $9.41 as the Middle East conflict disrupted international aviation.
Financials were the main drag on the bourse, led by heavy selling of the big four lenders. That follows a slump in US banks and private equity firms on Friday after UK mortgage provider Market Financial Solutions collapsed. Commonwealth Bank dropped 0.7% to $173.49, ANZ by 1.8% to $39.33, Westpac by 1.7% to $41.80 and National Australia Bank by 2.9% to $47.62.
Selling of the battered technology sector also resumed, with WiseTech Global off 4.7% to $45.29, Xero 3.8% to $79.97 and NextDC by 3.8% to $13.35.
In corporate news, Magellan Financial was in a trading halt as the investment manager launched an equity raising to fund a $1.6 billion merger with Barrenjoey Capital Partners.
Lynas Rare Earths added 5.4% to $20 as Malaysia’s atomic energy regulator renewed its operating licence for 10 years until 2036.
Ampol rose 3.2% to $29.06 as further assessment by the Australian Competition and Consumer Commission identified 54 EG Australia sites across 51 areas that may raise competition concerns, down from 115 locations flagged in January, as a result of the proposed takeover.
Web Travel dropped 6.5% to $3.02 as disruption to global air travel weighed, and chief financial officer Tony Ristevski withdrew his resignation made in November.
MA Financial fell 2.6% to $9 after it agreed to sell Infinite Care, the sole asset of its MA Aged Care Fund, to Anglicare Sydney for an undisclosed sum, delivering investors more than 2.8 times their invested capital over the life of the fund.
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