ASX 200 Jumps 2.6% on US-Iran Ceasefire
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- Australian shares jumped 2.6% to close at 8,951.80, their highest level in five weeks and the largest single-day gain in a year, driven by relief over geopolitical tensions.
- U.S.-Iran ceasefire agreement, brokered by President Trump, led to oil prices falling below $100 a barrel, reducing inflationary pressure on energy-importing economies like Australia.
- S&P/ASX 200 resources sub-index rose 4.6%, with BHP up 3% and Rio Tinto climbing 4.4%, as investors rotated into cyclical sectors amid easing commodity price fears.
- Financial stocks gained 2.8%, supported by gains of 1.9% to 3.9% in Australia’s 'Big Four' banks, reflecting improved sentiment toward rate-sensitive assets.
- Energy stocks dropped 7.2%, with Woodside Energy and Santos falling 10.5% and 4.1% respectively, as lower oil prices weighed on sector valuations.
- Tech and gold sub-indexes surged 7.3% and 8.8% respectively, indicating a risk-on move in equities and safe-haven demand during transitional geopolitical calm.
- New Zealand’s S&P/NZX 50 rose 1.4% to its highest in three weeks, mirroring regional risk appetite, while its central bank held rates steady amid inflation monitoring.
Why it matters: The ceasefire directly lowered oil prices, cutting input costs for businesses and consumers in import-dependent Australia, which shifts the RBA’s policy calculus and boosts equity valuations—especially in financials and materials—while hurting energy firms’ near-term earnings outlook by 7.2% in one day.
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