The worst oil supply disruption in history shows little sign of easing, keeping crude elevated since the Iran conflict began as Trump and Iran’s new leader signal little appetite for de-escalation. Washington has allowed more sanctioned Russian crude to flow in an attempt to cap prices, but markets are increasingly concerned that Trump & Co may have bitten off more than they can chew, particularly with US mid-term elections looming in November.
The ASX 200 endured another tough session on Thursday, falling -1.3% and chalking up another triple-digit decline. Several headwinds weighed on the market, most notably oil surging more than ~9% at one stage, with the knock-on impact on bond yields dominating the headlines. A plan by the International Energy Agency to release millions of barrels from strategic reserves failed to calm markets after reports that Iran struck oil tankers near the Strait of Hormuz, escalating fears of supply disruptions through the critical shipping route that carries roughly 20% of global oil trade. Every day Brent crude pushes above US$100 chips away at confidence that the global economy can quickly move past the Iran conflict.
The ASX 200 bounced another +0.6% on Wednesday with the miners and banks dragging the market higher, even when only 45% of the main board closed in positive territory. To put things into perspective, the local bourse closed up 50-points with the miners alone contributing +42 points to the day, helped by another solid day for iron ore, and related names. Traders were offered some relief from the recent volatility spurred by the Iran war on Wednesday after the International Energy Agency (IEA) reportedly proposed the release of oil reserves. Unfortunately, the market failed to follow the heavyweight sectors higher, with weakness resurfacing in the tech and high growth stocks, more on this later with the Tech Sector, closing down 1.6%, just missing out on the wooden spoon to the Utilities sector.
The ASX200 enjoyed a +1.1% relief rally on Tuesday, which saw almost 75% of the main board close higher. The rebound was driven by improved market sentiment, following President Trump's comments on the conflict in the Middle East. His optimistic comments drove oil prices well under the psychological $100 per barrel mark, and it was $94.37 per barrel at our close yesterday. US President Donald Trump told CBS the military operation in the Middle East was "very complete, pretty much" and "very far" ahead of its initial four-to-five-week schedule. A bounce in the influential materials and financials sectors drove the gains, with those two sectors accounting for more than 80% of the day's advance.
The ASX200 was hammered on Monday, down 2.9%, taking March’s decline to ~6.5% with the month only one-third complete. It’s remarkable to think the market closed at an all-time high of 9200 just a week ago. Stocks tumbled as the Middle East conflict rattled energy markets, pushing oil up more than 25% higher, at one stage testing US$120/barrel. At the same time, bond markets extended losses on rising inflation fears while the US dollar hit its highest level since January, as risk-off sentiment gripped global markets. There was nowhere to hide on a day when ~95% of the main board retreated, and oil and gas giant Woodside (WDS) could only close 2% higher.
One week in, and the Iran war has already severely disrupted global energy markets, with threats to shipping through the Strait of Hormuz effectively choking oil exports from the Persian Gulf and pushing crude prices to their highest levels in more than two years. As producers cut output and energy prices surge, the conflict is raising global inflation risks and intensifying concerns about energy security, particularly in Europe. The local market initially shrugged off last weekend’s US–Israel strikes on Iran, with the ASX200 closing at an all-time high on Monday. However, that early optimism quickly faded as investors began to acknowledge the conflict could last far longer than first imagined:
The ASX 200 limped to a +0.1% gain on Thursday, although some heavyweight names traded ex-dividend, including Woodside (WDS), QBE Insurance (QBE), RIO Tinto (RIO), South32 (S32), and BHP Group (BHP, taking roughly 30-points off the index. It was another very polarised affair on the stock/sector front, with plenty of reversion unfolding since Monday's panic sell-off - we’ve seen profit taking in the high-flying miners while bargain hunters have emerged in the battered tech space. Despite the uptick, the ASX200 is still down 2.8% from Monday's recent record high and oil prices have continued higher after Iran denied rumours its officials had sought de-escalation via diplomatic backchannels and on reports of fresh Iranian air strikes on Israel.
Hedge funds have shifted their short positions away from ASX resource names that benefited from the recent commodities boom, targeting consumer-facing stocks such as Treasury Wine Estates, Domino’s Pizza and Guzman y Gomez amid concerns around weakening household spending. Just six months ago, five of the six most shorted stocks on the ASX were resource plays, including uranium names Boss Energy and Paladin Energy, alongside lithium producers Pilbara Minerals, Liontown Resources and Mineral Resources. Today, traders have pivoted, with Domino’s Pizza now the most heavily shorted stock on the ASX, while Treasury Wine Estates and Guzman y Gomez also feature among the top five most shorted names.
The ASX200 haemorrhaged on Tuesday, closing down 123-points or 1.3%, as weak US futures, and a cautious Michelle Bullock broke the market's stubborn resistance - the local 3-year yield surged 0.15% during our day session following the RBA chiefs’ hawkish comments. We discussed the drop in bonds (yields higher) yesterday afternoon - Here. The move in bonds weighed on rate-sensitive stocks/sector, with the consumer discretionary, real estate and tech sectors all underperforming the main board, and closing down by more than 2% - more of the same is likely this morning after bonds fell further overnight, although they did bounce into the close. However, losses were broad-based on Tuesday, with almost 75% of the market closing down on the day.
The ASX200 was firm on Monday, shrugging off the conflict in the Middle East to close marginally higher, trading and closing above 9200 for the first time - not a good day for the bears! The index clawed back early losses as heavyweight miners rebounded from initial weakness to push firmly into positive territory. BHP led from the front, rallying over $2 from its early low to end the session up +1.4% at another all-time high, adding 14-points to the index on its own. By the close, the Materials and Energy Sector combined to add 67-points to the main board, offsetting the 55-point negative contribution from the financials as the story remained the same on the performance front.
The ASX 200 endured another tough session on Thursday, falling -1.3% and chalking up another triple-digit decline. Several headwinds weighed on the market, most notably oil surging more than ~9% at one stage, with the knock-on impact on bond yields dominating the headlines. A plan by the International Energy Agency to release millions of barrels from strategic reserves failed to calm markets after reports that Iran struck oil tankers near the Strait of Hormuz, escalating fears of supply disruptions through the critical shipping route that carries roughly 20% of global oil trade. Every day Brent crude pushes above US$100 chips away at confidence that the global economy can quickly move past the Iran conflict.
The ASX 200 bounced another +0.6% on Wednesday with the miners and banks dragging the market higher, even when only 45% of the main board closed in positive territory. To put things into perspective, the local bourse closed up 50-points with the miners alone contributing +42 points to the day, helped by another solid day for iron ore, and related names. Traders were offered some relief from the recent volatility spurred by the Iran war on Wednesday after the International Energy Agency (IEA) reportedly proposed the release of oil reserves. Unfortunately, the market failed to follow the heavyweight sectors higher, with weakness resurfacing in the tech and high growth stocks, more on this later with the Tech Sector, closing down 1.6%, just missing out on the wooden spoon to the Utilities sector.
The ASX200 enjoyed a +1.1% relief rally on Tuesday, which saw almost 75% of the main board close higher. The rebound was driven by improved market sentiment, following President Trump's comments on the conflict in the Middle East. His optimistic comments drove oil prices well under the psychological $100 per barrel mark, and it was $94.37 per barrel at our close yesterday. US President Donald Trump told CBS the military operation in the Middle East was "very complete, pretty much" and "very far" ahead of its initial four-to-five-week schedule. A bounce in the influential materials and financials sectors drove the gains, with those two sectors accounting for more than 80% of the day's advance.
The ASX200 was hammered on Monday, down 2.9%, taking March’s decline to ~6.5% with the month only one-third complete. It’s remarkable to think the market closed at an all-time high of 9200 just a week ago. Stocks tumbled as the Middle East conflict rattled energy markets, pushing oil up more than 25% higher, at one stage testing US$120/barrel. At the same time, bond markets extended losses on rising inflation fears while the US dollar hit its highest level since January, as risk-off sentiment gripped global markets. There was nowhere to hide on a day when ~95% of the main board retreated, and oil and gas giant Woodside (WDS) could only close 2% higher.
One week in, and the Iran war has already severely disrupted global energy markets, with threats to shipping through the Strait of Hormuz effectively choking oil exports from the Persian Gulf and pushing crude prices to their highest levels in more than two years. As producers cut output and energy prices surge, the conflict is raising global inflation risks and intensifying concerns about energy security, particularly in Europe. The local market initially shrugged off last weekend’s US–Israel strikes on Iran, with the ASX200 closing at an all-time high on Monday. However, that early optimism quickly faded as investors began to acknowledge the conflict could last far longer than first imagined:
The ASX 200 limped to a +0.1% gain on Thursday, although some heavyweight names traded ex-dividend, including Woodside (WDS), QBE Insurance (QBE), RIO Tinto (RIO), South32 (S32), and BHP Group (BHP, taking roughly 30-points off the index. It was another very polarised affair on the stock/sector front, with plenty of reversion unfolding since Monday's panic sell-off - we’ve seen profit taking in the high-flying miners while bargain hunters have emerged in the battered tech space. Despite the uptick, the ASX200 is still down 2.8% from Monday's recent record high and oil prices have continued higher after Iran denied rumours its officials had sought de-escalation via diplomatic backchannels and on reports of fresh Iranian air strikes on Israel.
Hedge funds have shifted their short positions away from ASX resource names that benefited from the recent commodities boom, targeting consumer-facing stocks such as Treasury Wine Estates, Domino’s Pizza and Guzman y Gomez amid concerns around weakening household spending. Just six months ago, five of the six most shorted stocks on the ASX were resource plays, including uranium names Boss Energy and Paladin Energy, alongside lithium producers Pilbara Minerals, Liontown Resources and Mineral Resources. Today, traders have pivoted, with Domino’s Pizza now the most heavily shorted stock on the ASX, while Treasury Wine Estates and Guzman y Gomez also feature among the top five most shorted names.
The ASX200 haemorrhaged on Tuesday, closing down 123-points or 1.3%, as weak US futures, and a cautious Michelle Bullock broke the market's stubborn resistance - the local 3-year yield surged 0.15% during our day session following the RBA chiefs’ hawkish comments. We discussed the drop in bonds (yields higher) yesterday afternoon - Here. The move in bonds weighed on rate-sensitive stocks/sector, with the consumer discretionary, real estate and tech sectors all underperforming the main board, and closing down by more than 2% - more of the same is likely this morning after bonds fell further overnight, although they did bounce into the close. However, losses were broad-based on Tuesday, with almost 75% of the market closing down on the day.
The ASX200 was firm on Monday, shrugging off the conflict in the Middle East to close marginally higher, trading and closing above 9200 for the first time - not a good day for the bears! The index clawed back early losses as heavyweight miners rebounded from initial weakness to push firmly into positive territory. BHP led from the front, rallying over $2 from its early low to end the session up +1.4% at another all-time high, adding 14-points to the index on its own. By the close, the Materials and Energy Sector combined to add 67-points to the main board, offsetting the 55-point negative contribution from the financials as the story remained the same on the performance front.
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