ASX loses $120 billion as oil prices soar

In Short:
– The Australian sharemarket lost nearly $120 billion due to a surge in oil prices amid Middle East tensions.
– The S&P/ASX 200 Index dropped 3.6%, with energy stocks performing well despite overall market volatility.

The Australian sharemarket experienced a significant decline, losing nearly $120 billion following a surge in oil prices due to escalating tensions in the Middle East. Oil prices rose nearly 30 percent, reaching around $US120 per barrel, as production disruptions occurred in the Strait of Hormuz.

The S&P/ASX 200 Index dropped 3.6 percent, marking its largest loss since the market turmoil sparked by former President Donald Trump’s tariffs. Concerns of renewed inflation, slowed global growth, and potential interest rate hikes heightened market volatility.

Market Reaction

Crude oil prices surged initially, prompting a swift sell-off in equities, particularly impacting stocks with high exposure to consumer discretionary spending. Energy stocks emerged as the top performers on the ASX, with notable gains from Woodside, Karoon Energy, Santos, and Beach Energy.

Coal miners rallied as gas supply interruptions led to increased prices, benefitting companies like Yancoal and Whitehaven Coal.

Materials sector saw sharp declines with BHP falling significantly amidst concerns about economic instability and tensions with China.

Equity Review

In corporate developments, Domino’s Pizza slipped despite share purchases from its chairman. DigiCo shares fell following the CEO’s announcement of personal leave.

Nanosonics gained on FDA clearance while Dyno Nobel’s shares dropped after selling its fertiliser division. Pro Medicus saw a slight decrease despite securing new contracts.

Amplitude Energy reported positive results from its well in Victoria, indicating potential growth.