Against a backdrop of escalating geopolitical conflict between the United States and Iran that sent global oil prices soaring and dragged most international equity markets lower, Australia’s domestic sharemarket defied broader headwinds to notch a marginal positive close in Monday’s trading session.
The benchmark S&P/ASX 200 squeezed out a tiny 2.50-point gain, equal to 0.03 percent, to settle at 8808.50, while the broader All Ordinaries index posted a barely perceptible 0.70-point drop, or 0.01 percent, to end the day at 9003.00. The Australian dollar also softened against the U.S. dollar, falling to 69.29 U.S. cents by market close.
Trading was deeply split across the market’s 11 sectors, with five closing in positive territory. Solid gains in consumer discretionary stocks and the nation’s largest retail banks offset a sharp downturn in the technology sector, which pulled the overall market back from larger gains. Leading the upward momentum in consumer discretionary was retail conglomerate Wesfarmers, which climbed 1.81 percent to $91.32. The Lottery Corp added 1.46 percent to close at $5.56, and electronics retailer JB Hi-Fi rose 1.09 percent to finish at $78.95.
Australia’s big four national banks emerged as one of the day’s strongest performing groups. Commonwealth Bank of Australia gained 0.69 percent to hit a round $170.00, Westpac Banking Corp added 0.99 percent to reach $36.90, National Australia Bank climbed 1.11 percent to $40.05, and Australia and New Zealand Banking Group outperformed its peers with a 1.14 percent rally to close at $36.46.
The main drag on market performance came from technology stocks, which collectively slumped 2.57 percent after a weak lead-in from overseas tech markets. Cloud accounting firm Xero led the downturn, dropping 4.31 percent to $70.24. Logistics technology firm WiseTech Global fell 2.00 percent to $33.32, and data center operator NextDC declined 3.16 percent to $13.50.
The escalating exchange of military strikes between the U.S. and Iran dominated market sentiment through the session, driving a near five percent spike in international Brent Crude prices, which rose to just over $79 U.S. per barrel, equal to roughly $113.99 Australian. Iran launched missile and drone attacks on bases linked to the U.S. across Bahrain, Kuwait and Jordan, while the U.S. military carried out coordinated strikes on Iranian military infrastructure, including air defense systems, coastal radar outposts, and missile and drone facilities. Over the weekend, Iran announced it would close the strategically critical Strait of Hormuz, a key chokepoint for 20 percent of global oil supplies, until further notice, though U.S. Central Command confirmed the waterway remained open to transit.
Vivek Dhar, head of commodities and sustainability research at Commonwealth Bank, explained that the oil price jump stemmed from market uncertainty over the future accessibility of the strait. “Over the past week, oil prices have traded in a tight range between $75 U.S. and $80 U.S. per barrel,” Dhar noted. “This price range signals that markets broadly expect the Strait of Hormuz will remain open for oil tanker transit, so investors have heavily discounted Iran’s claims that it has closed the waterway.”
In individual corporate news, fashion retailer City Chic was one of the day’s top performers, with shares surging 27.78 percent to $0.069 after the firm upgraded its underlying earnings before interest, taxes, depreciation, and amortization guidance to a range of $11.5 million to $12.5 million, representing an 80 to 95 percent jump compared to the same period last year. Aged care provider Regis Healthcare fell 2.53 percent to $6.16 after chief financial officer Rick Rostolis announced he would retire at the end of August, capping a more than 40-year career across multiple ASX-listed firms. Outdoor advertising firm Ooh!media jumped 4.07 percent to $1.54 after confirming it had received three non-binding takeover proposals from private equity groups Pacific Equity Partners, I Square Capital, and Oaktree Capital Management. The leading proposal values the firm at $871.6 million. Mining firm Regis Resources slipped 0.92 percent to $60.46 after it announced it would abandon its planned acquisition of junior miner Vault Minerals, clearing the way for rival bidder Genesis Minerals to proceed with its own takeover offer for Vault. Following the announcement, Genesis shares climbed 3.70 percent to $5.88, while Vault Minerals added 0.82 percent to close at $4.91.