Energy stocks lead share market higher as oil surges
Australia’s stock market rose, led by a rise in energy stocks, with oil rising to six-week highs after the US and Iran intensified attacks on each other over the weekend.
The main S&P/ASX200 index rose 1.4 points, or 0.02 percent, to 8,798.1 points at midday trading on Monday, while the All Ordinaries rose 2.6 points, or 0.03 percent, to 8,981.4 points.
“The war between the United States and Iran is escalating again, and in some ways it resembles the tumultuous early days of the conflict in March and April,” said Kyle Rodda, senior market analyst at Capital.com.
“Traffic from the Persian Gulf is reportedly falling to a trickle, indicating further upside risk to oil prices that could push the crude oil deficit higher today.”
Brent crude rose above $90 a barrel for the first time since early June, just days after the United States imposed a military blockade on Iranian ports and the Middle Eastern country targeting ships passing through the Strait of Hormuz, the transit point for one-fifth of global crude oil supplies.
ASX-listed energy stocks outperformed the sector stock market, rising almost two per cent at midday, with Woodside, Santos and refinery operators Ampol and Viva Energy following a strong lead.
Coal miners also performed well, while uranium stocks rose after Deep Yellow signed a $34 million construction contract for its flagship Tumas project in Namibia.
The heavyweight financial segment improved 0.2 percent, tracking modest gains by the big four banks, while insurer QBE rose nearly a percent after announcing it would use $500 million of subordinated bonds issued in 2020.
Non-energy miners continued to struggle; The raw materials sector fell 0.3 percent, with BHP trading flat and Rio Tinto losing 1.4 percent to $158.70.
Gold producers were mixed but larger players were largely stagnant, with the precious metal trading at US$4,004 ($5,730) an ounce.
South32 improved production across multiple projects and increased June quarter sales by 15 percent, helping the mixed miner’s share price rise 1.4 percent to $3.96.
Consumer-facing stocks remained under pressure as staples rose 0.3 percent and cyclical goods traded roughly flat.
Shares in Dan Murphy’s and BWS owner Endeavor fell more than three per cent after Morgan Stanley downgraded it, citing a limited recovery in alcohol demand.
Meanwhile, the Australian Securities and Investments Commission has imposed a record fine of $830 million in the 2025/26 financial year and will return $643.5 million to Australians in remediation, refunds and disbursements in connection with enforcement work.
The Australian dollar was buying 69.88 US cents, up slightly from 69.84 US cents at 5pm on Friday.
