Source : THE AGE NEWS
The Australian sharemarket turned lower and oil prices climbed again after Donald Trump’s prime-time speech to the US as the president failed to give any more clues on when the Iran war may end, dampening investor exuberance that had taken global markets on a relief rally over the past two days.
The S&P/ASX 200 fell 54.60 points, or 0.6 per cent, to 8617.20 as of 1.16pm AEDT, having gained 0.5 per cent in early trade, as miners and tech stocks declined. The local bourse soared by 2.2 per cent in a $57 billion rally on Wednesday. The Australian dollar traded at US69.24¢.
The drop in the market comes after Trump said in his speech the US would hit Iran extremely hard over the next two to three weeks to “finish the job” in Iran as “core strategic objectives are nearing completion”. In the runup to the speech, investor confidence had been building that a US scaling back of military action against Iran would help ease geopolitical tensions.
Trump got a wide audience and a chance to articulate clear objectives for the war after weeks of changing goals and often contradictory messages about whether he’s winding down or ready to escalate military operations — even as Iran kept up its attacks on Israel and Persian Gulf neighbours and airstrikes pounded Tehran.
But he spent much of his time repeating some of the same things he said in recent weeks, failing to provide a clear plan to end the war.
“Each passing week increases the global economic costs of the Iran conflict,” wrote Tiffany Wilding, economist at Pacific Investment Management. At some point, “the economic effects of persistent disruptions will start to build, with recessionary implications for the global economy.”
The mining and tech sectors, which had both been rallying in the previous session, turned south after the speech as profit-taking set in. Iron ore giants BHP (down 1.7 per cent), Fortescue (down 2.6 per cent) and Rio Tinto (down 2.1 per cent) all declined, and gold miners backed off their recent rally, with Northern Star Resources slipping 0.6 per cent and Evolution Mining falling 2.8 per cent.
Tech stocks slumped after their surge on Wednesday, with software makers WiseTech, Xero and Technology One down 3.8 per cent, 2.7 per cent and 1.7 per cent, respectively, and data centre operator NextDC losing 3.3 per cent.
Oil prices rose back over the $US100-mark per barrel following Trump’s speech, with Brent Crude, the international benchmark, climbing 4.4 per cent to $US105.64 amid waning hopes for a swift resolution to the conflict. Energy stocks moderated their heavy morning declines, with Woodside and Santos down 1.5 per cent and 0.6 per cent, respectively, by lunchtime.
Surf and outdoor apparel retailer KMD’s shares tanked 54.8 per cent as it emerged from its trading halt after the owner of the struggling Rip Curl brand said it completed a $58.5 million emergency capital raising from institutional investors to shore up its balance sheet.
Wider market losses were limited, however, by financial stocks, which make up more than one-third of the ASX and largely held on to their gains. All big four banks traded higher, with CBA and National Australia Bank both up 0.7 per cent, Westpac rising 0.4 per cent and ANZ Bank adding 0.8 per cent.
On Wall Street overnight, the S&P 500 rose 0.7 per cent and added to its leap from the day before, which was its best since early 2025. That followed even bigger gains for markets across Europe and Asia – including an 8.4 per cent surge in South Korea – after Wall Street’s rally. The Dow Jones Industrial Average rose 0.5 per cent, and the Nasdaq composite jumped 1.2 per cent.
The Wall Street rebound began after a couple of tenuous signals of hope from earlier on Tuesday that Wall Street latched onto, including a news report quoting Iran’s president as saying that it has “the necessary will to end the war” as long as certain requirements are met, including “guarantees to prevent a recurrence of aggression”.
The worry on Wall Street has been that the war may last a long time and keep oil and natural gas from the Persian Gulf out of global markets, which could create a brutal blast of inflation.
But hope has been quick to reverse to doubt on Wall Street, triggering manic swings back and forth for financial markets since the war with Iran began. Trump has also made statements that lifted markets, only to see the gains quickly disappear after increasing his military threats.
Shortly before Wall Street began trading on Wednesday, Trump claimed in a post on his social media network that Iran “has just asked the United States of America for a CEASEFIRE!”
“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”
But Iranian Foreign Ministry spokesman Esmail Baghaei quickly called that claim “false and baseless”, according to a report on Iranian state television.
Iran, meanwhile, hit an oil tanker off the coast of Qatar and Kuwait’s airport on Wednesday, while airstrikes battered Tehran as the fighting continued. Iran also continues to hold a grip on the Strait of Hormuz, where one-fifth of the world’s traded oil passes during peacetime.
“De-escalation hopes have given markets a lift, but we think the effects of the war would, in many cases, persist even if the war did end soon,” Thomas Mathews, head of Asia Pacific markets at Capital Economics, said in a research note on Wednesday.
“It’s worth thinking through how markets might fare if the war were to end ‘very soon’. Do markets have further to recover if sentiment continues to improve? The answer is almost certainly yes.”
Most US stocks rose as Big Tech powered the move higher. Gains of 2.8 per cent for Alphabet and 0.8 per cent for Nvidia were among the strongest forces lifting the S&P 500.
Eli Lilly climbed 3.8 per cent after US regulators approved its GLP-1 pill for weight loss.
Such gains have pulled the S&P 500 back to within 6 per cent of its all-time high set early this year. Just on Monday, the index briefly neared a 10 per cent drop from its record, a steep-enough fall that professional investors have a name for it: a “correction”.
Nike sank 15.5 per cent even though it reported a stronger profit for the latest quarter than expected. Analysts said it gave some lacklustre financial forecasts.
Hasbro fell 4.5 per cent after the toy company found someone had gained unauthorised access to its computer network and is working to assess the full impact.
In other international markets, indexes leaped more than 2 per cent in France and Germany. Asian markets had even bigger gains, with Tokyo’s Nikkei 225 up 5.2 per cent.
In the bond market, Treasury yields held relatively steady overnight after a report said US retailers made more money in February than economists expected. A separate report said US manufacturing growth last month was slightly faster than economists expected.
The 10-year Treasury yield held at 4.30 per cent, where it was late Tuesday.
With AP, Bloomberg
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