Australian share market: ASX200 nosedives as Donald Trump’s ultimate to Iran over oil flow sparks sell-off
The ASX is edging closer to a market correction as tens of billions of dollars were wiped off the Australian bourse in the opening minutes of trade on Monday.
Australia’s share market has flirted with correction territory as Donald Trump’s ultimatum to Iran escalated a broadening war that has already wiped 4 per cent from retirement nest eggs.
Having nosedived 1.8 per cent on opening on Monday, the S&P-ASX200 was briefly off 10 per cent from its record peak of seven weeks ago, marking a technical correction.
However, a fightback reduced its loss to 0.74 per cent, the index closing at a 10-month low of 8365.9 points, as gains in energy, utility, healthcare and consumer discretionary stocks partly offset falls by mining, property and industrial shares.
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By continuing you agree to our Terms and Privacy Policy.Australia’s flagship equity barometer has now lost 9 per cent, wiping $300 billion off share values, since the US and Israel launched attacks on Iran on February 28.
While sending oil and gas prices soaring, fuelling inflation across global chains and threatening world economic growth, the conflict is also playing out on superannuation accounts.
US president Donald Trump added to investor fears about the ever-escalating conflict on Sunday by giving Iran a two-day deadline to reopen the global oil gateway of the Strait of Hormuz or face strikes on its power plants.
Iran countered that it would close the strait “completely” and target energy, information technology and desalination infrastructure if its power facilities come under attack.
“President Trump’s threat has now placed a 48-hour ticking time bomb of elevated uncertainty over markets,” IG market analyst Tony Sycamore said.
Car retailer Eagers Automotive was the day’s biggest winner on the ASX, leaping 6.3 per cent. Premier investments and AUB rose more than 5 per cent.
Miners suffered the biggest losses, with the sector down 3.1 per cent. Iron ore powerhouses Rio Tinto, BHP and Fortescue were all down sharply at the start but managed to recover some ground.
Gold producers were also under selling pressure, with Catalyst Metals and Ora Banda Mining down 14 per cent and 11 per cent, respectively.
Brent crude futures rose one per cent to $US107.47 a barrel. Base metals silver, platinum, copper and palladium all extending huge falls from last week.
“The market is becoming increasingly worried this conflict could become a protracted affair, broader in nature and structurally inflationary,” National Australia Bank’s economics team said
“(Over the weekend) evidence mounted that the conflict was escalating rather than de‑escalating. Iran continued attacks on neighbouring Gulf states, while the IEA warned the war represents the greatest global energy security threat in history, with oil and gas infrastructure likely to take six months or longer to return to operation.”
Originally published on The Nightly
