Source : THE AGE NEWS
The Australian sharemarket opened higher on Tuesday, tracking Wall Street gains as US President Donald Trump raised hopes for an Iran deal even as a blockade of the Strait of Hormuz took effect. Qantas dropped after a profit warning due to the jet fuel price shock from the war.
S&P/ASX rose 41.7 points, or 0.5 per cent, to 8967.70 as of 10.54am AEST, with nine of its 11 industry sectors in the green. The bounceback comes after the local bourse fell 0.4 per cent on Monday following a poor showing by tech stocks, and as investors reacted to news of the US-Iran negotiations’ failure and Trump’s vow to blockade the crucial oil passageway.
The Australian dollar slipped 0.1 per cent to US70.88¢.
Cyclical sectors led the gains amid the renewed optimism for a resolution of the conflict weighing on the world economy. Tech stocks were sharply higher, with software firms WiseTech Global and Xero gaining 4.8 per cent and 4.4 per cent, and data centre operator NextDC up 4.1 per cent.
Iron ore and copper giants BHP (up 2 per cent), Rio Tinto (up 1.6 per cent) and Fortescue (up 1 per cent) were also trading higher. On the consumer front, Bunnings and Officeworks owner Wesfarmers (up 1.6 per cent) and furniture seller Harvey Norman (up 1 per cent) advanced, while data centre owner Goodman Group (up 3 per cent) and shopping centre landlords Scentre (1.4 per cent) and Vicinity (up 1 per cent) were driving gains for real estate investment trusts.
Qantas fell 1.2 per cent after the company raised its fuel cost outlook and delayed a planned share buyback, citing sharply higher jet fuel prices since the war in the Middle East cut oil supply. The airline said jet fuel prices have more than doubled, lifting its estimated fuel bill for the second half of fiscal 2026 to between $3.1 billion and $3.3 billion, up from its prior forecast of $2.2 billion.
Westpac shed 1.5 per cent. The nation’s second-largest lender raised its provisions for potential bad loans to 10 basis points of average gross loans, up from 6 basis points previously, saying an “expected slowing in economic growth” due to the war “will create a more challenging environment for some customers”. It also warned its first-half profit would take a $75 million hit from the sale of its RAMS mortgage portfolio.
Energy stocks also declined as the oil price eased on signs Washington and Tehran may revive peace talks following the start of a US blockade. West Texas Intermediate fell toward $US96 a barrel, while Brent settled near $US99 on Monday. The two sides are in discussions on holding more negotiations for a longer-term ceasefire before their two-week ceasefire expires on April 22, sources said. Oil and gas giants Woodside and Santos were down 0.9 per cent and 1.4 per cent, respectively, while fellow fossil fuel producer Yancoal fell 1.9 per cent.
Cleanaway lost 3 per cent after the waste management company cut its earnings forecast for this year by $20 million due to higher fuel and logistics costs as a result of the war.
On Wall Street overnight, US stocks closed at session highs and were back in the green for 2026 after Trump said Iran still wanted to make a deal following a deadlock in peace talks and his blockade of the strait. The S&P 500 rose 1 per cent to its highest level since late February.
The gains were helped by the oil market, where prices briefly jumped over $US100 per barrel after 21 hours of ceasefire talks failed over the weekend to end the conflict, and then pared their leaps as the session progressed. And the moves were much more modest than the extreme swings that have hit financial markets since the war began in late February.
The moves followed Trump’s claim that Iran had reached out to his administration on potential peace talks, as the US began its naval blockade of the Strait of Hormuz in the war’s seventh week. With Tehran yet to confirm further discussions, investors remain wary of renewed volatility as the risk of escalation lingers.
“The markets really want to give peace a chance, accentuating the positives and downplaying the negatives as tensions between the US and Iran simmer away,” said Kyle Rodda, analyst at Capital.com. “Despite this, the risk for further volatility remains high, with headline risk continuing to drive the action.”
And, as with so many pronouncements made so far in the US-Iran war, much will depend on the details of the blockade and exactly what gets restricted.
“Not all blockades are created the same,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Trump said on Monday on his social media platform that “34 Ships went through the Strait of Hormuz yesterday, which is by far the highest number since this foolish [Iran] closure began.”
In the meantime, big US companies are beginning to tell investors how much money they made during the first three months of the year. Strong reports could help make up for worries about the Strait of Hormuz on Wall Street because stock prices tend to follow the trend of corporate profits over the long term.
Goldman Sachs, the investment bank, said it made $US5.63 billion in profit during the quarter, more than investors expected. But financial analysts pointed to some potentially concerning signals including lower revenue from the trading of fixed income, commodities and currencies. Its share price fell 2.3 per cent.
Oracle’s gain of 11.2 per cent was the biggest in the S&P 500, which helped it recover some of its sharp loss for the year so far on worries that it may be spending too much to build up its artificial-intelligence capabilities.
In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury remained at 4.31 per cent, where it was late on Friday.
With AP, Reuters, Bloomberg
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