ASX erases $40b as crude rises above $US100; IperionX sinks

The Australian sharemarket erased $40 billion in value on Thursday as oil prices rallied back above $US100 a barrel after an attack on two tankers in Iraqi waters, and Oman evacuated vessels from its key export terminal.

The S&P/ASX 200 Index dropped 114.50 points, or 1.3 per cent, to 8629, with energy the sole sector to climb amid renewed fears about the oil price from the escalating Iran war.

Brent crude surged by 9.7 per cent to $US100.86 per barrel as Iraq stopped operations at its oil ports after two tankers were targeted, and Bloomberg reported that Oman had shifted ships away from the port of Mina Al Fahal as a precaution.

Wilson Asset Management portfolio strategist Damien Boey warned that the latest turmoil could escalate into a much larger economic shock.

“Attacks on neighbouring Gulf countries, destroying their oil infrastructure or attacking their oil infrastructure, that’s not sending exactly the right messages to markets,” Boey said. “Because of higher uncertainty, higher oil prices, and tightening financial conditions, we could see world growth momentum stall.”

On the ASX, energy stocks rallied. Woodside Energy climbed 2.1 per cent to $31.05, Karoon Energy 4.8 per cent to $1.98, and Ampol 2.9 per cent to $30.27.

Yancoal jumped 10.5 per cent to $7.71 – a 52-week high, and Whitehaven Coal gained 6.7 per cent to $9.29 as coal prices continued to rise amid the oil chaos in the Middle East and as UBS upgraded its forecasts.

Elsewhere, the prospect of an interest rate rise in Australia next week weighed on the rest of the bourse. ANZ, Commonwealth Bank and Morgan Stanley are the latest banks to bring forward their rate increase expectations to this month.

The rate-sensitive technology sector tumbled with Xero dropping 4.1 per cent to $78.48 and WiseTech 2.6 per cent to $47.96. Real estate stocks were heavily sold as Goodman Group fell 3.3 per cent to $26.18 and Scentre 1.4 per cent to $3.49.

The risk-off sentiment hit the materials sector with BHP down 1.9 per cent to $50.98, Newmont 2.9 per cent to $160.95 and Rio Tinto 1.4 per cent to $153.09. Banks were also sold off, with ANZ falling 2.5 per cent to $37.02 and National Australia Bank 2 per cent to $46.40.

Stocks in focus

In company news, Ora Banda Mining rose 1.4 per cent to $1.43 after new drilling in its high-grade Little Gem gold prospect in Western Australia uncovered a previously unknown mineralised zone.

IperionX dived 14.3 per cent to $6.12 as its net losses doubled over the December half to $US34.8 million from higher R&D and exploration costs.

Atlas Arteria slid 1.3 per cent to $4.51 even as the Virginia legislature in the US passed a bill allowing toll road operators to seek approval for up to two years of toll increases at a time, extending the current one-year limit.

Liontown dipped 0.9 per cent to $1.61 as the miner reported a net loss of $184 million for the half year, driven by a $104.4 million non-cash accounting charge.

Collins Foods surged 5.2 per cent to $9.92 as it agreed to acquire eight KFC restaurants in Bavaria to expand in Germany, a key growth market.

Alcoa rose 4.4 per cent to $90.57 after UBS upgraded aluminium forecasts as a result of the Middle East conflict and said the stock was its preferred Australian exposure, lifting its share price target to $95.

That’s a wrap on today’s news. Join us again soon for more live markets news.