The ASX was hit early on the Iran conflict, down ~1% before recovering as the day progressed to finish a couple of points higher – not a great day for the bears who sold early. US Futures were trading down 1% at the outset, and while they recovered ~0.20% throughout the session, the resilience by the ASX was impressive, underpinned by Gold, Energy & defensives.
Oil prices were up 6.5% with Futures trading $US77.50/bbl while Gold added +$US75/oz to be $US5353/oz at our close. The AUD fell 0.35% to US70.94c, having been down more, earlier. Big moves, but certainly not disorderly ones by any stretch and there is no real sign of any panic setting in to markets at this stage – the duration of this conflict will now be very important from a markets perspective.
- The ASX200 added +2pts/+0.03% to close at 9200.
- Energy (+5.5%), Staples (+2.35%) and Materials (+1.95%) kept the bourse afloat.
- Technology (-3.07%), Financials (-1.77%) and Consumer Discretionary (-0.83%) weighed.
- Energy stocks surged over 5%, cushioning broader market weakness. Woodside (WDS) +6.8%, Santos (STO) +6.7% and Karoon (KAR) +15.2% led the charge.
- Gold miners also attracted strong flows, with Newmont (NEM) +5.7%, Northern Star (NST) +4.8% and Evolution Mining (EVN) +6.6% investors sought protection from geopolitical risk.
- DroneShield (DRO) +6.6% increased focus on counter-drone capability amid regional escalation
- Travel and tourism stocks were hit on lower demand expectations – Flight Centre (FLT) -5.7% and WEB Travel (WEB) -6.5% + QANTAS (QAN) -5.4% doesn’t like the prospect of higher jet fuel prices.
- Macquarie (MQG) –6.4% was hit hard as volatility picked up, keying off decent falls from US peers on Friday night
- Major banks were lower ANZ Group (ANZ) -1.8%, Comm Bank (CBA) -0.7%, National (NAB) -2.9% and Westpac (WBC) -1.7%
- Magellan Financial Group (MFG) was in a trading halt to raise equity for its $1.6bn all-scrip merger with Barrenjoey Capital Partners – more on this later.
- Lynas Rare Earths (LYC) +5.4% rallied after Malaysia renewed their operating licence through 2036, removing a major overhang.
- Ampol (ALD) +3.2% after the ACCC narrows EG Australia competition concerns to 54 sites, improving the prospect that some sort of deal will be reached.
- MA Financial (MAF) –2.6%: announced the sale of Infinite Care for a good price, but it does remove a key earnings asset
- The bounce in tech stocks has proven short lived; Xero (XRO) -3.8%, WiseTech (WTC) -4.7%, Technology One (TNE) – 4.3% and NextDC (NXT) -3.8%
- Coles (COL) +3.8% rallied on a string of broker upgrades after weakness post results.
- Looking at the MM Portfolios today, Growth dipped ~0.4%, Income was flat, Emerging Companies fell -1.2% and Core ETF was up ~0.1%.
- Iron ore was up ~0.3% at $US98.70/mt
- Asian markets were mixed; China up +0.3%, Hong Kong down -1.6% and Japan fell -2%.
- US futures are trading down ~0.9%, pricing a weaker open in the states – banks will be in focus after a decent sell-off on Friday.
