ASX jumps on peace deal; Gold miners and travel stocks rally, oil stocks fall

The Australian sharemarket rallied on Monday after Donald Trump announced a peace deal that includes an immediate ceasefire “on all fronts” of the war in the Middle East. The S&P/ASX 200 finished up 110 points, or 1.25 per cent, at 8914 as oil prices declined following Trump’s announcement, which came after a series of clashes almost derailed the agreement.

Brent Crude, the international standard, was down 4.4 per cent at $US83.49 a barrel by late afternoon.

Six of the ASX’s 11 industry sectors advanced, led by the mining and financial heavyweights. Travel stocks soared, while energy stocks were sold off on expectation the oil crunch will ease as the crucial Strait of Hormuz is set to reopen on Friday. The Australian dollar rose 0.

4 per cent to US70.75¢. The peace agreement paves the way to end a conflict that has claimed thousands of lives, disrupted the global economy and driven volatility across financial markets since the end of February.

“Markets have been waiting for this news for months, and the relief is already showing,” said Josh Gilbert, lead analyst for Asia Pacific and the Middle East at eToro, a multi-asset investment platform operator. “However, this is still a move of optimism, not certainty. The nerves won’t fully settle until the deal is signed, meaning investors should still err on the side of caution.”

Trump confirmed the peace deal with a statement on social media shortly after a key negotiator in the talks, Pakistani Prime Minister Shehbaz Sharif, formally announced the agreement. “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all!”

he said on social media on Sunday evening in Washington (about 7.30am on Monday, AEST). “I hereby fully authorise the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade.

Ships of the World, start your engines. Let the oil flow!” The critical waterway would reopen on Friday after the clearing of mines, Trump later added.

The signing ceremony for the deal will be held on Friday in Switzerland, Sharif said. “There are just so many timelines involved, and I don’t know whether there is a clear sequence for all these terms to be implemented,” said Muyu Xu, a senior crude oil analyst at commodity intelligence firm Kpler. “A lot can happen during these windows, and Iran could close the strait again if it believes the US or Israel have taken any deal-breaking steps.”

Mining stocks led the relief rally on the ASX, with the iron ore and copper mining heavyweights BHP (up 3.6 per cent), Rio Tinto (up 2.7 per cent) and Fortescue Metals (up 3 per cent) all advancing.

Gold producers rallied as prices for the precious metal jumped up in anticipation the oil price shock will ease, softening inflation and the pressure on central banks to raise interest rates. Higher rates make bullion less attractive to investors lured by rising bond yields. Northern Star Resources climbed 7.

9 per cent, Evolution Mining soared 10 per cent and Newmont jumped 6.8 per cent. Real estate investment trusts also benefited from bets that slowing inflation will allow an easing in interest rates, boosting their appeal against government bonds.

Goodman Group rose 1.7 per cent, Charter Hall gained 3.2 per cent and Stockland rose 3.

3 per cent. The big four banks were all higher, helping lift the local market, with financial stocks making up more than a third of the ASX. CBA, the nation’s biggest lender, gained 1.

4 per cent. Westpac added 0.9 per cent, National Australia Bank rose 2.

6 per cent and ANZ Bank rose 1 per cent. Even exchange operator ASX Ltd added 2.6 per cent, despite news that it has to pay a $20.

5 million penalty after admitting it misled the market about its troubled CHESS replacement project. The corporate regulator and ASX have agreed to ask the Federal Court to impose the penalty, plus $3 million in costs, over a February 2022 market announcement that said the project was “progressing well”. Clearing House Electronic Subregister System, or CHESS, is the system used to settle share trades.

Travel stocks soared, buoyed by prospects of moderating jet fuel prices and hopes of an end to booking uncertainty and disruptions for international travellers as the war ends. Qantas Airways lifted 6.3 per cent, Virgin Australia shares rallied 12.

9 per cent and Flight Centre gained 7.3 per cent. Tech stocks also advanced, helped by the market’s renewed risk-on sentiment and SpaceX’s record-breaking initial public offering over the weekend.

WiseTech Global was up 2.4 per cent and AI data centre operator Next DC added 1.7 per cent.

Sigma Healthcare surged 6.1 per cent after the owner of the Chemist Warehouse chain announced its withdrawal from the Boots sale process, after being among the parties exploring a potential acquisition of the British pharmacy chain in a deal worth as much as $14 billion. Sigma “has elected to withdraw its interest and cease discussions immediately,” it sa