Escalating geopolitical tensions between the United States and Iran, sparked by the seizure of an Iranian vessel near the strategically critical Strait of Hormuz, sent global oil prices jumping by as much as 8% on Monday — but the move failed to lift Australian equities, which closed barely changed in a choppy session of mixed sector performance.
The benchmark S&P/ASX 200 eked out a marginal 6.4-point gain, or 0.07%, to settle at 8,953.30, while the broader All Ordinaries index added an even smaller 5.4 points, equivalent to 0.06%, to end the day at 9,174.10. The Australian dollar also posted a minor uptick, rising 0.24% to buy 71.51 U.S. cents by market close.
Across the benchmark’s 11 sectors, the day split evenly: six finished in positive territory while five closed lower. The most counterintuitive movement came from the energy sector, which led the declines despite Monday’s dramatic surge in Brent Crude prices. The global oil benchmark climbed as high as 8% intraday before settling at $95.50 U.S. ($133.30 Australian) as investors priced in growing supply risk from the disrupted Strait of Hormuz, through which roughly 20% of global oil supplies transit daily.
Major Australian energy stocks posted steep losses: Woodside Energy fell 2.93% to $31.77, Santos dropped 1.31% to $7.55, and fuel retailer Ampol slid 3.19% to $31.88. Viva Energy was an even bigger laggard, plummeting 9.09% to $2.30 after resuming trading following a major fire at its Geelong refinery the previous week.
Losses across energy were largely offset by strong gains in consumer-facing stocks and most of the financial sector. Retail giant Wesfarmers, which owns brands including Bunnings and Kmart, led consumer discretionary gains with a 2.44% jump to $74.63. Electronics retailer JB Hi-Fi added 0.55% to $76.49, and furniture chain Harvey Norman gained 0.88% to $4.61.
Among the big four banks, three closed higher: Commonwealth Bank of Australia rose 1.08% to $180.15, Westpac added 0.73% to $40.02, and ANZ nudged up 0.03% to $37.93. The outlier was National Australia Bank, which tumbled 3.60% to $41.02 after the lender disclosed it was boosting provisions for bad debt ahead of its first-half results, citing rising risk from the ongoing Middle East conflict involving the U.S., Israel and Iran. The bank now forecasts total impairment costs of up to $706 million, up from a previous projection of $485 million before the escalation of regional tensions.
Another company caught in the crossfire of Middle East uncertainty was engineering firm Worley, which dropped 5.84% to $11.13 after warning that ongoing conflict would delay operational activities and contract awards, dragging down its full-year 2026 financial outlook.
The only major standout on the day was buy now, pay later provider Zip Co, which extended a Friday rally with a 7.73% gain to $2.51 on Monday. The surge followed a bullish quarterly update released Friday that showed third-quarter cash earnings before interest and tax jumped 41.5% year-over-year, driven primarily by robust revenue growth in the U.S. market. The stock had already rallied 13.66% on Friday.
Market analysts noted that overall trading sentiment remained muted as investors adopt a wait-and-see approach to evolving geopolitical developments. “Markets are in a holding position as they await more news out of the US and Iran conflict,” said Tony Sycamore, market analyst at IG. “Either the data will break or the blockade will break. When you talk about the data breaking, we aren’t at that point although Japan, New Zealand and the UK inflation will give an indication. We also have a ceasefire coming up and I don’t think anyone thinks the ceasefire won’t be extended.”
Additional uncertainty filtered through markets following conflicting reports around planned regional peace talks: U.S. officials confirmed Vice President JD Vance would join a diplomatic delegation traveling to Pakistan for talks, but Iranian state media has already indicated Tehran will not attend the negotiations, dashing early hopes of a near-term de-escalation of tensions.