Peace hopes send ASX higher in early trade; Tabcorp tanks on AUSTRAC probe

The Australian sharemarket jumped in early trade, extending Wednesday’s gains, after oil prices sank and stocks rallied worldwide on hopes that the United States and Iran are nearing a deal to end a war that has jolted markets and clouded the global economic outlook.

The S&P/ASX 200 climbed 70 points, or 0.8 per cent, to 8863.60 just after 11am AEST, with the mining giants doing most of the heavy lifting, while energy stocks fell in tandem with the oil price. The morning’s outlier was Tabcorp, which plunged 22 per cent on news that it is the subject of a money laundering investigation by regualtor AUSTRAC. The ASX had surged by 1.3 per cent in the previous session. The Australian dollar jumped overnight and was trading at US72.33¢.

“Iran cannot have a nuclear weapon, and they won’t, and they’ve agreed to that, among other things,” US President Donald Trump told reporters at the White House. “We’ve had very good talks,” he said, “and it’s very possible that we’ll make a deal.”

Trump said the war has “a very good chance of ending” and there’s a possibility that happens before his trip to Beijing next week, according to an interview with PBS News Hour. China’s top diplomat called for the swift reopening of the Strait of Hormuz in a meeting with his Iranian counterpart.

“We remain on the path towards de-escalation, and towards an end to the conflict,” said Michael Brown at Pepperstone. “While that path is clearly a rough one, so long as we remain on it, and the direction of travel remains a more optimistic one, then risk appetite should remain underpinned.”

The price for a barrel of Brent crude oil, the international standard, fell 7.8 per cent to $US101.27, down from more than $US115 early this week. It dropped as Trump said the strait could be “OPEN TO ALL” if Iran accepts a reported agreement that he did not detail.

The small strait has caused big trouble for the global economy because the war with Iran has blocked oil tankers from using it to exit the Persian Gulf. A reopening could allow oil to flow freely again and ease inflation that’s driving prices up for all kinds of products worldwide.

Heartened by the improving prospects for the global economy, Australia’s mining giants rallied in early trade. Iron ore miners Rio Tinto and Fortescue Metals rose 2.1 per cent and 2.2 per cent. BHP, the world’s largest miner, shot up 3 per cent despite news overnight that it can’t appeal against a UK ruling that it is liable for the 2015 collapse of a dam in southeastern Brazil in a case potentially worth billions of pounds.

Gold miners also advanced as prices for the precious metal held after their biggest daily advance since late March as hopes of peace deal eased inflation concerns. Bullion traded above $US4690 an ounce this morning, after jumping 3 per cent on Wednesday. Northern Star Resources rose 2.5 per cent, Evolution Mining climbed 4.4 per cent and Newmont gained 2.4 per cent. Silver miner South32 climbed 3.6 per cent as silver prices also increased.

Travel stocks gained amid hopes an end to the war could ease pressure on jet fuel prices and end shortages as oil flows again, and boost consumer confidence to travel into the northern hemisphere summer. Qantas shares lifted 3.4 per cent, Virgin Australia rose 3.3 per cent and travel agent Flight Centre gained 2.4 per cent.

On the flipside, betting company Tabcorp plummeted 20.9 per cent after revealing it is being investigated by Australia’s anti-money laundering regulator over “serious concerns” in its ability to prevent illegal activity on its platform. Tabcorp said it had received a letter from AUSTRAC that it was looking into its compliance with anti-money laundering and counterterrorism financial rules.

Tabcorp’s announcement said AUSTRAC had advised that its investigation is at an early stage and its “approach will be determined once sufficient evidence has been collected and assessed… AUSTRAC has also advised that all potential outcomes remain open, including the possibility that no further enforcement action will be taken.”

The fall in oil prices sent energy stocks lower, with oil and gas giants Woodside and Santos down 4.3 per cent and 2.9 per cent, respectively. Local refiners Ampol and Viva Energy lost 2.9 per cent and 4.2 per cent, and alternative fossil fuel provider Yancoal shed 1.9 per cent.

The big four banks were mixed, with CBA up 1.1 per cent, Westpac up 2.2 per cent and ANZ Bank up 0.9 per cent, while National Australia Bank lost 2 per cent.

Shares in ARN News were unchanged after shareholders in Kyle Sandilands and Jackie “O” Henderson’s former radio network revolted over the company’s executive pay packets, amid a cratering share price and investor anger over the network’s handling of its two stars. Investors overwhelmingly voted against the company’s remuneration report, including chief executive Michael Stephenson’s fixed $1.1 million pay, with more than 90 per cent of proxy votes opposing it.

On Wall Street overnight, the S&P 500 climbed 1.5 per cent for its best day in nearly a month and hit another all-time high. The Dow Jones jumped 1.2 per cent, and the Nasdaq composite rose 2 per cent to its own record.

Stock markets abroad had even bigger gains, with indexes leaping 6.5 per cent in Seoul, 2.9 per cent in Paris and 2.1 per cent in London.

Of course, hopes have risen several times already on Wall Street about a possible end to the war with Iran, only to get dashed each time. That could happen again, and oil prices pared some of their steepest losses from Wednesday morning.

In the meantime, big US companies continue to turn in much stronger profits for the start of 2026 than analysts expected. That’s supporting the stock market despite all the uncertainties created by the war.

AMD helped lead the market with a surge of 18.6 per cent after it joined the list of big-name companies topping expectations for both profit and revenue. CEO Lisa Su said the chip company benefited from continued growth from artificial-intelligence technology, which is demanding tremendous amounts of computing power from data centres.

Another company enmeshed in the AI industry, Super Micro Computer, rallied 24.5 per cent after likewise delivering stronger earnings than analysts expected. Nvidia, the chip company that became the poster child of the AI boom, rose 5.7 per cent and was the single strongest force lifting the S&P 500 because of its immense size.

Elsewhere, Elon Musk’s SpaceX estimated a chip factory it plans to build along with Tesla will cost as much as $US119 billion ($164 billion), with total investment potentially exceeding the amount the rocket maker aims to raise from a record initial public offering.

In the bond market, Treasury yields sank as falling oil prices took pressure off inflation. The yield on the 10-year Treasury dropped to 4.35 per cent from 4.43 per cent late Tuesday. That’s a notable move for the bond market.

with AP, Bloomberg

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