Aussie shares rebound on tentative ceasefire deal
Australia’s stock market is on track to round off a volatile week from where it started after stocks rebounded following news that the US and Iran will extend a fragile ceasefire to finalize a permanent peace deal.
The S&P/ASX200 was up 80.8 points at midday trading on Friday, up 0.94 per cent to 8,637.7 points, while the broader All Ordinaries was up 89.1 points, or 1.01 per cent, to 8,908.7 points.
“The United States and Iran are reportedly on the verge of an agreement to extend the ceasefire for another 60 days, and the deal is said to include a free reopening of the Strait of Hormuz,” said Kyle Rodda, senior market analyst at Capital.com.
“The movement in oil prices has been negligible, indicating that the peace premium has almost been priced into the market, leaving markets very disappointed if the so-called deal turns out to be a new false dawn.”
Wall Street indices rose to new record levels overnight, driven by geopolitical developments and weaker-than-expected US economic data that kept the Fed’s interest rate cut hopes alive.
“Markets are as bullish as they have been since the beginning of the war, and risk appetite has increased tremendously,” Mr. Rodda said.
Brent crude fell to a six-week low overnight, trading at $92.34 a barrel, outperforming local energy oil and gas giants Woodside and Santos, which were down one percent and 0.6 percent respectively.
Refinery operators Ampol and Viva are selling along with coal miners, while uranium stocks have rebounded from recent weakness.
Qantas and Virgin Australia rose more than two per cent on expectations of a drop in jet fuel prices, while Transurban, Brambles and Computershare also rose.
While mining stocks continue to fluctuate due to the impact of the US-Iran conflict, the basic materials sector jumped 2.4 percent on Friday morning and is heading for a positive week.
Major miners BHP, Rio Tinto and Fortescue rose even as iron ore futures fell to six-week lows on oversupply and growing concerns that steel demand from China will be weaker than expected.
The rise in the gold price to US$4,535 ($6,331) per ounce boosted the local sub-industry of the commodity by 4.7 percent.
The heavyweight financial sector improved 0.4 per cent, led by similarly sized recoveries from ANZ and NAB.
Commonwealth Bank shares rose 0.2 per cent to $161.80 by midday; That’s roughly 18 percent from all-time highs, but it’s also off the 2026 low of $146.98.
Real estate stocks were heading for a positive week, up 1.3 percent, while discretionary retail sales rose 0.7 percent.
The Australian dollar was buying 71.61 US cents at 71.22 US cents at 5pm on Thursday.
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