分类： business

Australia’s benchmark share index bounced back from steep early losses to close in positive territory on Monday, after a sudden policy shift from former U.S. President Donald Trump that pulled back from planned military strikes against Iran and calmed global market jitters over energy inflation.

Heading into the trading day, futures markets had priced in a roughly 1% opening drop for the Australian Securities Exchange, as investors braced for escalating Middle East tensions that threatened to push global oil prices sharply higher. But the market trajectory shifted dramatically mid-morning after Trump announced he had called off what he described as a major planned military strike on Iran, a strike that would have been the largest offensive against the country since World War II. The announcement eased widespread fears that conflict would disrupt global oil supplies and trigger a new spike in global inflation.

By the closing bell, the benchmark ASX 200 had gained 42.50 points, or 0.47%, to settle at 9019.30. The broader All Ordinaries index followed suit, adding 41.40 points, or 0.45%, to reach 9178.40. The Australian dollar edged lower during Monday’s session but held above the key psychological threshold of 70 U.S. cents, closing at 70.34 U.S. cents.

Nine out of the ASX’s 11 industry sectors finished the day in positive territory, led by strong gains in utilities, healthcare, and consumer discretionary stocks. The utilities sector posted the strongest performance of any group: Origin Energy climbed 2.88% to $11.07, AGL Energy rose 1.93% to $8.44, and Genesis Energy surged 5.85% to $2.17. Consumer discretionary stocks also posted solid gains, with retail conglomerate Wesfarmers rising 1.45% to $90.66, electronics retailer JB Hi-Fi adding 0.60 points to close at $82.42, and automotive group Eagers Automotive gaining 1.40% to $23.85.

The only notable drag on overall market gains came from the energy sector, where falling oil prices pushed most major stocks lower. Brent crude futures fell 5.3% to settle at $83.26 a barrel, after dipping as low as $81.55 earlier in the session as tensions de-escalated. Top Australian energy producers reflected the drop: Woodside Energy shares fell 1.37% to $32.50, and Santos slumped 1.91% to $7.89. Refiner and retailer Ampol bucked the trend, posting a marginal 0.08% gain to close at $39.93.

Speaking to reporters aboard Air Force One on Sunday, Trump explained that he had opted to pause planned strikes to open the door for diplomatic negotiations, set to launch on Monday afternoon. “Obviously, they don’t want to be attacked. They knew the extent of the attack because they saw it forming,” he said. “Now what we’re doing is we’re talking to them in the form of a negotiation. It begins tomorrow afternoon.”

Tony Sycamore, senior market analyst for IG, noted that the sudden de-escalation removed a key layer of risk that had spooked investors in prior sessions. He added that Trump also signaled a potential deal governing shipping through the Strait of Hormuz — a critical global oil chokepoint — is within reach, with talks on Iran’s nuclear program to follow after initial negotiations. Still, Sycamore struck a cautious note on the long-term outlook for tensions: “Whether this turns into a rinse and repeat of last week — with hopes of a deal collapsing as Iran digs in its heels and continues to leverage its control over the Strait, potentially through an attack on a US base or a tanker transiting the waterway remains to be seen.”

In individual company news, mining giant Fortescue continued a downward trend from the previous week, sliding another 3.84% to close at $17.80 — a 12-month low for the stock. The drop was driven by falling iron ore prices, with Singapore iron ore futures falling 1.90% to $94.25 a tonne. Elsewhere, Steadfast Group jumped 2.94% to $5.26 after the company issued an update to the market confirming that a KKR-led consortium reaffirmed its planned takeover offer for the business at $6 per share.

Australia’s federal fuel excise discount has officially expired, triggering an immediate, nationwide increase in fuel prices that has piled new pressure on motorists already grappling with soaring cost-of-living expenses. Automotive advocacy group the NRMA reported that average national prices for unleaded petrol rose by 3.2 cents per litre on the first full day after the discount was lifted, while diesel prices jumped an average of 3.4 cents per litre across the country.

Regional variations show the burden hitting different cities unevenly: Adelaide recorded an almost 4 cent per litre increase for both petrol and diesel, while Perth saw diesel prices surge by 5.1 cents per litre. Most notably, the price gap between different fuel grades has hit historic milestones not seen in Australian fuel market history. The national difference between budget E10 blend and high-octane Premium 98 fuel now sits at a record 30.5 cents per litre, beating all previous measurements. In Sydney alone, the gap between E10 and Premium 98 reached 26.5 cents per litre – the widest margin recorded in the city since 2012. The gap between E10 and mid-tier Premium 95 also broke records, climbing to 19.1 cents per litre nationally, up from the previous high of just 13 cents per litre.

With these unprecedented price gaps, NRMA spokesman Peter Khoury is urging Australian drivers to “shop smarter” at the bowser and consider lower-cost fuel alternatives when their vehicles allow. Khoury explained that for many motorists, paying premium prices for high-octane fuel is an unnecessary expense, and switching to cheaper blends can deliver meaningful savings for households stretched thin by inflation and ongoing global energy volatility linked to the Ukraine war. By opting for E10 fuel, a standard 55-litre tank can save drivers up to $17 per fill-up, he noted, while also supporting domestic biofuel production, boosting regional Australian jobs and cutting national dependence on imported oil.
“It is absolutely critical that Australians understand that they have choice at the bowser,” Khoury said. “With the excise going up today and the war continuing, finding smart ways to save at the bowser remain critical for many Australian struggling with cost-of-living pressures.”

In anticipation of the price shift, Treasurer Jim Chalmers has moved proactively to prevent price gouging by service stations, writing to Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb to call for heightened scrutiny of fuel pricing as the excise returns to its pre-cut level. Chalmers emphasized that the restoration of normal excise rates cannot be used as justification for unjustified, excessive price hikes that exploit motorists. The ACCC has been directed to investigate any reports of misleading pricing, anti-competitive behavior or unfair markup, and Chalmers reminded service station operators that penalties for price gouging have been increased, with violating businesses facing fines of millions of dollars for breaking consumer protection laws.
“Any price increase that could not be explained will face serious scrutiny from the ACCC,” Chalmers said. “We’ve jacked up the penalties for petrol stations that rip off Australians. They face multimillion-dollar fines if they break the law.”

As of Monday, the NRma’s ongoing price monitoring indicates most service stations are adjusting prices fairly in line with the reinstated excise. Khoury noted that the measured, proportional price increases recorded so far give the association confidence that most retailers are acting in accordance with regulatory guidelines.
Alongside the return of the standard fuel excise, the heavy vehicle road user charge has also reverted to its normal rate of 32.4 cents per litre, up from the discounted rate of 16.4 cents per litre that applied to liquid fuels including diesel for the duration of the government’s stimulus measure.

In a Sunday virtual gathering of core OPEC+ member states, Saudi Arabia, Russia, and five other major oil-producing nations have formally approved a planned 188,000 barrel per day increase in crude oil production set to launch in September. The decision comes against a turbulent backdrop of ongoing Middle East conflict that has severely disrupted shipping and oil supply flows through the Strait of Hormuz, one of the world’s most critical energy chokepoints.

Following the closed-door meeting, the seven participating nations released a brief joint statement confirming the production adjustment, a move that many energy market analysts had already predicted weeks in advance. This incremental production hike marks the final step in unwinding the second of three separate production cut packages rolled out by the alliance between the Organization of the Petroleum Exporting Countries and its non-OPEC partners between late 2022 and 2023, when the group moved to curb output to stem falling global oil prices, slashing a combined total of nearly six million barrels per day from global markets.

Industry analysts note that the immediate market impact of the new production quota will be limited for the foreseeable future. For months, Gulf oil exporters have faced major barriers to ramping up exports, as the Strait of Hormuz — which carries roughly a fifth of all global oil traded internationally — has remained effectively constrained amid Iranian actions tied to the ongoing Middle East war. This logjam has persisted even after a brief uptick in shipping following a June memorandum of understanding between the United States and Iran.

“OPEC+ has finished unwinding its voluntary cuts. The next challenge is managing the surplus that could emerge as export flows normalise,” explained Jorge Leon, senior oil market analyst at Oslo-based energy research firm Rystad Energy. Leon added that “today’s decision changes little in the near term because Hormuz remains constrained. The real market impact will come when normal export flows resume.”

Beyond the immediate supply disruptions caused by geopolitical tensions, many OPEC+ members face structural barriers to hitting their new production targets. Giovanni Staunovo, a commodity analyst at global investment bank UBS, pointed out that numerous member nations are already unable to match their official quota levels due to long-term declines in domestic production capacity, meaning formal target increases have far less tangible impact on actual global supply than they may appear.

Multiple member nations also face idiosyncratic challenges that limit their ability to ramp up output. Russia, one of the alliance’s two leading producers, has seen its production crimped by repeated Ukrainian drone strikes on its domestic oil infrastructure, with current output hovering around 9 million barrels per day — 800,000 barrels below its official target. While some countries like Iraq have publicly stated a desire to significantly boost production, the timing of when the alliance as a whole can actually deliver higher volumes to global markets remains uncertain.

Looking ahead, market analysts broadly expect OPEC+ to hold off on any further supply adjustments for the final quarter of 2024 as the group begins preparations for new quota negotiations scheduled for 2027. “Having completed the restoration campaign, OPEC+ has little incentive to rush into further supply changes. Our base case is a fourth-quarter pause while the group prepares for the 2027 quota negotiations,” Leon said. He added that “for now, geopolitics is masking the scale of the supply increase. That will become much clearer once export flows normalise.”

The alliance also faces growing internal frictions heading into upcoming quota talks scheduled to take effect next year. Analysts at DNB Carnegie note that OPEC+ “faces potentially difficult talks over new production quotas” starting in 2025, when the group plans to continue its gradual strategy of restoring production cuts. The May 2024 exit of the United Arab Emirates from the core voluntary cut group exposed existing internal divides, though Leon noted that alliance cohesion is not at immediate risk.

“’I don’t think cohesion is at risk at this very moment,’” Leon said, though he warned that the UAE’s departure has laid bare underlying vulnerabilities in the alliance’s collective decision-making process.

Australian motorists bracing for sudden steep increases at the petrol pump have been reassured that the end of the temporary 16 cents per litre fuel excise cut will not push up prices overnight. The six-month cost-of-living relief measure is set to officially expire at midnight Sunday, but Energy Minister Chris Bowen says consumers will not feel the full impact for around a week as existing fuel stock already held at service stations was purchased at the lower excise rate.

The fuel excise cut was first introduced in April as an emergency response to global oil price volatility sparked by the outbreak of conflict between the United States and Iran, which disrupted global supply chains and forced intermittent closures of the Strait of Hormuz – a critical chokepoint for global oil transportation. When first launched, the cut reduced excise payments by 32 cents per litre, bringing the total tax per litre down from 52.6 cents to 20.6 cents. The discount was tapered to 16 cents per litre in July as part of the planned phase-out of the policy.

Bowen explained that just as the initial excise cut took time to flow through to lower retail prices for consumers, the reversal of the cut will also take time to work through the supply chain. “The excise has already been paid on the fuel stored underground at service stations, and replenishment cycles vary across different operators,” Bowen told reporters on Saturday. “Just as we saw when the cut came into effect, the same gradual adjustment will happen on the way back up.”

To protect consumers from unfair pricing practices as the excise returns to its original level, the Australian Competition and Consumer Commission (ACCC) has been granted enhanced monitoring powers to crack down on price gouging. Bowen warned that any retailer found engaging in illegal pricing practices will face substantial penalties, noting that the watchdog is already actively monitoring market trends across the country. “The ACCC is on the beat, they have the powers to act, and they will take action against any operators that break the rules,” he said.

In addition to the end of the passenger vehicle fuel excise cut, the heavy vehicle road user charge will also return to its standard rate of 32.4 cents per litre from Monday. The charge for liquid fuels such as diesel had been cut to 16.4 cents per litre for the duration of the relief program.

Treasurer Jim Chalmers has repeatedly emphasized that the excise cut was always intended to be a temporary emergency measure, not a permanent policy change. The government extended the cut at half its original value after the initial six-month period to smooth the transition for consumers, aligning with the original plan to phase out the relief gradually.

“It was never the government’s intention for this relief to be permanent,” Chalmers said. “We extended it at half the rate because we always planned to taper it off gradually to avoid sudden shock to household budgets.”

When the conflict first erupted in late February, global oil prices spiked dramatically, pushing Australia’s fuel price index up 32.8% between February and March – from 94.35 to 125.29. The Reserve Bank of Australia identified rising fuel costs as a key driver of national headline inflation, estimating that the full excise cut would reduce overall inflation by 0.5 percentage points. The sharp price rise at the start of the year also pushed down consumer fuel consumption, which fell 7% in April and 10% in May compared to the previous year, as many Australian households cut back on driving to manage costs.

As of 26 July, the average national retail price of petrol sits at 182.3 cents per litre. Industry analysts expect this average will rise gradually over the coming week as the excise change flows through the supply chain, with the full 16 cent per litre increase hitting consumers by the end of next week for most regions.

The Australian equity market wrapped up a mixed trading session to notch its fourth straight month of gains in July, driven largely by a surge in materials stocks fueled by skyrocketing investor demand for copper—an critical raw material for the global rollout of artificial intelligence infrastructure. While the benchmark ASX 200 only posted a modest 0.1% gain, climbing 9.10 points to close at 8976.80, the performance marked a milestone for the local index that aligns with July’s historic reputation as one of the strongest calendar months for Australian equities. The broader All Ordinaries followed a similar trajectory, rising 14.30 points (0.16%) to settle at 9137.00, and the Australian dollar edged up to 70.32 U.S. cents by market close.

Of the 11 major sectors tracked on the ASX, only five finished the trading day in positive territory. The standout growth came from the materials sector, which has increasingly acted as a domestic proxy for the global AI trade. Mining giants BHP and Rio Tinto led the rally, with BHP shares climbing 1.96% to $60.31 and Rio Tinto jumping 1.28% to $170.57, as copper prices climbed on growing investor recognition of copper’s non-substitutable role in manufacturing AI data center hardware, power infrastructure, and semiconductor equipment.

Joseph Marassa, a strategist at Global X ETFs, explained that the local materials rally came on the heels of an overnight rally on the U.S. Nasdaq and a broad resurgence in investor optimism around AI development. “Materials continue to act as a local proxy for the AI trade, with investors seeking copper exposure – a key input to the AI build out – on the back of the overnight Nasdaq rally and renewed AI sentiment,” Marassa noted. Global tech markets echoed this optimism overnight: South Korea’s KOSPI index surged 17.91% led by major chip manufacturers SK Hynix and Samsung Electronics, while the U.S. Nasdaq 100 gained 3.36% to cap off a strong overnight trading session.

The strong gains in materials were largely offset by downturns in defensive sectors, however. Healthcare stocks led the declines, with vaccine and biotech giant CSL dropping 3.81% to $123.06, Sigma Healthcare sliding 0.68% to $2.94, and medical device maker ResMed falling 1.52% to $29.79. Consumer staples also faced broad pressure, with major domestic supermarket chains both closing in the red: Woolworths dropped 1.73% to $39.77, while Coles slipped 0.70% to $24.09. Dairy producer A2 Milk also underperformed, dragging down 2.55% to $6.89.

Despite the muted daily gain, market analysts highlighted that the ASX 200’s July performance delivered a solid 2.37% monthly return, not far off the 2.73% average July gain recorded over the past 10 years, reinforcing the month’s long-held reputation as the strongest for Australian equities. IG senior Market Analyst Tony Sycamore noted that the four-month winning streak has been supported by a combination of domestic macroeconomic factors and global sentiment shifts. “The ASX200’s gains this week have been supported by the cooler Australian inflation report for June and a more measured tone from the RBA Governor on Tuesday, which reinforced expectations the cash rate will remain at 4.35 per cent next month,” Sycamore explained, adding that “Solid trading updates from two of the major miners added further support.”

In individual company news, several firms posted strong gains on positive corporate updates. Medical technology firm 4D Medical saw its shares jump 13.08% to $3.63 after releasing its quarterly activity report, which showed operating revenue hit $7.2 million, a 23% year-on-year increase. Energy giant Origin Energy added 0.94% to $10.76 after reporting that its June quarter revenue rose 6% from the prior quarter to $1.96 billion. The biggest single-day gain went to Energy One, whose shares rocketed 31.80% to $14.30 after the company revealed it had received an unsolicited, indicative, conditional acquisition proposal from Norwegian energy technology firm Volue AS.