Australian shares drop as US vows new oil blockade
Australia’s stock market fell after Middle East peace talks collapsed over the weekend and the US announced it would begin its own blockade of the Strait of Hormuz.
The benchmark S&P/ASX200 index fell 34.6 points, or 0.39 percent, to 8,926.0 points on Monday, while the broader All Ordinaries fell 42.3 points, or 0.46 percent, to 9,113.5 points.
Brent crude rose 7 per cent to $102 a barrel, climbing above $100 a barrel for the first time in almost a week, after US President Donald Trump announced the US Navy would begin imposing a blockade of the critical waterway from midnight (AEST) on Monday.
The speaker of Iran’s parliament and his chief negotiator warned that the country had “huge, untouched levers” to counter any naval blockade, an adviser to Iran’s supreme leader warned warned Americans would soon be nostalgic for $4 to $5 gasoline.
Capital.com analyst Kyle Rodda said the stage is now set for a hot war in which events have the potential to spiral out of control, including possible attacks on Gulf energy assets and civilian infrastructure.
Etoro market analyst Josh Gilbert said the window for a clean resolution is narrowing and investors should be prepared for the possibility that things could get worse before they get better.
Eight of the ASX’s 11 sectors were down; telecommunications and utilities increased modestly, and energy rose 2.1 percent due to a rise in oil prices.
Woodside and Ampol rose 2.6 percent, Santos rose 1.7 percent and New Hope rose 4.6 percent.
The ASX’s technology sector was the worst performer, down 1.8 per cent, partly due to Life360’s big decline.
Shares of the family location-sharing platform fell 8.1 percent to an 18-month low of $17.91 after CEO Lauren Antonoff announced layoffs and plans to restructure the company around an AI-led strategy on Friday.
In consumer staples, A2 Milk fell 13.0 per cent to an eight-month low of $8.04 after the Kiwi dairy company cut guidance, saying problems including conflict in the Middle East were hampering its ability to supply baby milk formula to the Chinese market.
In the heavy mining sector, all iron ore giants finished in the green.
BHP rose 0.7 percent to $54.35, Rio Tinto rose 0.5 percent to $172.07 and Fortescue rose 0.1 percent to $20.28.
However, gold miners had difficulty as the precious metal changed hands for $4,742 per ounce, down $44 from Friday.
Northern Star fell 2.0 percent, Evolution fell 2.4 percent and Westgold Resources fell 2.9 percent.
In the financial sector, the big four banks were mostly lower.
NAB fell 0.9 percent to $44.95, Westpac fell 0.4 percent to $42.59 and CBA fell 0.1 percent to $183.20.
ANZ remained stable at $38.84.
Elsewhere in the sector, EML Payments fell 35.7 per cent to 37 cents, the lowest in a decade, after the prepaid card company cut its full-year earnings forecast, citing in part weaker-than-expected business in the northern hemisphere.
In healthcare, Telix Pharmaceuticals rose 7.7 per cent to a six-month high of $15.77 after the radiopharmaceutical company announced a partnership with a US company that will provide an upfront payment of US$40 million ($56 million).
The Australian dollar was trading from 70.62 US cents to 70.44 US cents at 5pm on Friday.
ON ASX:
* S&P/ASX200 fell 34.6 points or 0.39 percent to 8,926.0 points.
* More broadly, the All Ordinaries fell 42.3 points, or 0.46 percent, to 9,113.5.
One Australian dollar is traded as follows:
*70.44 US cents, down from 70.62 US cents at 5pm AEDT on Friday.
* 112.47 Japanese yen from 112.46 Japanese yen.
* 60.29 euro cents from 60.43 euro cents.
* 52.53 British pence, from 52.63 British pence.
* 120.85 New Zealand cents from 120.89 New Zealand cents.
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