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ASX falls to three-week low on Iran fears
The Australian sharemarket slipped to a three-week low on Monday, despite Commonwealth Bank reaching a new record high, on the back of fears an Iranian response to the US bombing could see the price of crude oil skyrocket.
On a volatile day of trading, the benchmark ASX200 fell 30.6 points or 0.36 per cent to 8,474.9 on Monday – its lowest point since June 3 – although it rallied from down nearly 1 per cent during the afternoon's trading.
The broader All Ordinaries also slumped, down 35.50 points or 0.41 per cent to close the session at 8,688.
The Aussie dollar also fell on the news out of Iran and is now buying US64.18c.
On an overall volatile day, eight of the 11 sectors finished in the red, with financials and the energy sector leading the way. Eight of the 11 sectors fell during a volatile day of trading. Photo: Gaye Gerard / NewsWire Credit: News Corp Australia
IG market analyst Tony Sycamore said the sell-off was in line with US futures on well-founded fears after the US conducted strikes with B-2 Stealth Bombers on three Iranian nuclear sites over the weekend.
'The US insists the strikes were aimed at halting Iran's nuclear ambitions, not regime change, but Trump's rhetoric suggests openness to further action, Mr Sycamore said.
'You would have been forgiven for thinking we would have a really volatile session on Monday.
'Whether it's just caution or because we have seen nothing from Iran just yet to shake things up further … we are in a hold until we know more.'
One of the bright spots on the ASX was the financial sector, with Commonwealth Bank hitting a fresh record high of $184.41, before closing up 1 per cent to $184.35.
Mr Sycamore said Commonwealth Bank remains a 'juggernaut that steamrollers people.'
'I don't know where it stops and when it stops but it's the best of the banks and that is the sector where people want to be,' he said. The ASX fell after the US confirmed bombs were dropped on Iran's nuclear facilities. Photo: Gaye Gerard / NewsWire Credit: News Corp Australia
Overall, it was a mixed day for the major banks, with Westpac closing up 0.63 per cent to $33.42.
National Australia Bank slipped on the bell, down 0.08 per cent to $38.88 and ANZ dropped 0.63 per cent to $28.21.
Energy stocks, which initially bounced on the opening bell, trimmed their earlier gains in line with the oil price but still closed the day in the green.
Takeover target Santos closed 1 per cent higher to $7.78 while Woodside Energy traded flat and Ampol gained 0.47 per cent to $5.86.
Iron ore miners continued their weakness with market heavyweight BHP slumping 1.57 per cent to $35.64, Rio Tinto dropping 0.33 per cent to $101.83 and Fortescue Metals sliding 1.02 per cent to $14.54.
In company news, shares in Australia's largest airline Qantas fell 1.85 per cent to $10.08 on the back of higher oil prices.
Discounted retailer The Reject Shop announced shareholders had overwhelmingly voted in favour of a $259m takeover by Canadian discount retailer Dollarama at a meeting on Monday.
Homewares and furniture retailer Adairs plunged 20.5 per cent to $2.05 after telling the market that full-year earnings would come in below last year's.
