Australian shares extend gains as signs of Iran war de-escalation lift risk appetite

Australian shares edged higher on Tuesday as strong gains in banks outweighed losses in miners and energy stocks, while risk appetite remained buoyant for a second session on revived hopes for an end to the Iran war. The S&P/ASX 200 index rose 0. 3% to 9, 050. 40 by 1217 GMT, after rising 0. 5% on Monday. Comments from US President Donald Trump on Monday that talks with Iran were underway prompted an around 7% drop in oil prices overnight, pushed bond yields lower and lifted global equities, with the S&P 500 gaining 1. 48% overnight. However, the road to a near-term resolution still appeared rocky, given Iran has denied that any negotiations were being held or planned, instilling caution among investors. In Sydney, financials led the charge, rising 0. 9%, and were set to close at their highest level since mid-April if gains held. The “big four” banks rose between 0. 6% and 1. 4%. “Good results” from banks are widely expected by investors as mortgage growth has only just started to slow, analysts at Morgan Stanley said. Miners fell 0. 6%, with the biggest drag coming from BHP, down 1. 7%. The miner was set to hold talks with unions at its Port Hedland iron ore operations over a four-year wage deal, which, if reached, could avert a two-day strike set for the weekend. Energy stocks extended losses, down 0. 4%, tracking a fall in oil prices, with major oil and gas producers Santos and Woodside Energy falling around 2% each. Fuel retailer Ampol broke its three-day winning streak since Thursday, when it had reported a three-fold increase in quarterly refining margins, dropping over 2% on the day. The local technology sector got a boost from a strong overnight performance by US tech stocks, rising 2. 6% to hit its highest level since July 10. Real estate stocks rose 0. 7%, with Charter Hall Social Infrastructure REIT jumping as much as 5. 5% after it reported 12. 6% growth in annual operating earnings. Healthcare stocks added 0. 9%. New Zealand’s benchmark S&P/NZX 50 index rose 0. 1% to 13, 791. 74 points.

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