Aussie shares dive as Trump and Tehran trade threats
The Australian stock market fell sharply after Iran responded to a US ultimatum to reopen the Strait of Hormuz by threatening to attack the water and energy infrastructure of its gulf neighbours.
The benchmark S&P/ASX200 fell 131.1 points at midday trading on Monday, down 1.56 per cent to 8,297.3 points, while the broader All Ordinaries fell 147.7 points, or 1.70 per cent, to 8,484.7 points.
The All Ordinaries, which includes Australia’s 500 most valuable companies, has fallen 10 per cent from all-time highs, with $322 billion wiped from the index since the war began on February 28.
US President Donald Trump has issued an ultimatum to Iran to reopen the Strait of Hormuz, a chokepoint for a fifth of global oil supplies, within 48 hours or face US attacks on its power plants.
If Trump does so, Iran has vowed to attack energy infrastructure and key desalination plants in the Gulf countries where US bases are located.
“President Trump’s threat has now placed a 48-hour time bomb of increasing uncertainty on markets,” said IG market analyst Tony Sycamore.
The escalating conflict has caused global oil prices to rise, inflation concerns to rise, pressure on global growth prospects and a hit to stock markets.
Australian miners have been hit hard, with the sector down 4 per cent at midday, taking losses to more than 23 per cent since the start of the war.
Megaminers BHP and Rio Tinto fell more than two percent, while hybrid miner South32 fell 4.9 percent to $3.79.
Gold producers were under selling pressure; The precious metal fell to US$4,358 ($A6,227) an ounce, with Evolution, Northern Star and Newmont all down seven per cent or more.
Gold stocks made up the majority of the top 200’s 15 worst-performing stocks.
Local energy stocks were nearly flat, with Woodside and Santos gaining roughly 0.5 percent, while coal miners and uranium stocks lagged.
Owners of Australia’s two remaining crude oil refineries, Ampol and Viva, gained 0.9 per cent and 1.3 per cent respectively.
Industrial shares were trading down 1.4 per cent, while Qantas fell 1.3 per cent to $8.23 and Virgin Australia took a 7.3 per cent hit, following ongoing disruptions to global travel and both airlines saying they would increase airfares to account for rising jet fuel costs.
The heavyweight financial sector was weakened as all four major banks traded lower, with NAB shares falling two per cent to $44.66 and CBA losing 0.8 per cent to $174.26.
Major insurers bucked the broader trend, with QBE, Suncorp and IAG posting gains.
ARN Media shares fell 4.6 per cent to 31.5 cents after shock jock Kyle Sandilands took legal action against the group after it took The Kyle and Jackie O Show off the air and terminated his $100 million contract, according to company news.
SGH, controlled by the Stokes family, appointed Boral subsidiary business manager Matt McKenzie to the top job to replace current chief executive Vik Bansal on April 1.
The Australian dollar was buying 69.95 US cents at 70.86 at 5pm on Friday.
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