‘Fear is stalking markets’: ASX plunges amid Iran war
Derek Rose |
The local share market has suffered its worst single-day loss in 11 months amid the widening war in the Middle East and a spike in oil prices.
The benchmark S&P/ASX200 index on Monday dropped 252 points, or 2.85 per cent, to 8,599, its lowest level since mid-December.
The broader All Ordinaries fell 2612.5 points, or 2.88 per cent, to 8,823.6.
“Awful day at the office today,” said Moomoo ANZ chief executive Michael McCarthy.
“It was ugly, really ugly.”
At one point, the market was down 4.4 per cent, and while it managed to claw back some of that in afternoon trading, it was still the ASX’s second-worst single day of losses since the COVID-19 pandemic.
Mr McCarthy noted Tokyo’s stock exchange was down six per cent, and futures market indicates that the US and European markets were set to fall two per cent at the open.
“It’s clear fear is stalking markets everywhere, because it’s not just here,” he said.
Markets were already dealing with uncertainty about the impact of artificial intelligence, fears about private credit markets and a much weaker-than-expected US jobs report that dropped Friday night Australian time, Mr McCarthy said.
But then Iran threatened over the weekend to openly target other countries’ oil refineries in retaliation for the US-Israeli strikes on its energy infrastructure.
“That’s what really scared investors,” Mr McCarthy said.
“Because the big problem here is that gumming up the global oil markets slows down the global economy while pushing prices higher. That’s the recipe for stagflation.
“That’s why markets are so fearful today.”
Brent crude spiked to $US110 a barrel, the commodity’s highest price since August 2022.
It had been changing hands at just over $60 at the start of 2026.
Monday’s rout left the ASX200 at its lowest level since mid-December and wiped out almost $90 billion in value from its market capitalisation.
The last time the local bourse had such heavy losses was in April 2025, when it plunged 4.2 per cent amid US President Donald Trump’s intensifying trade war.
Every sector of the ASX finished in the red on Monday except for energy, which closed 1.7 per cent higher.
The heavyweight materials sector, which includes mining, was the biggest loser, dropping 4.83 per cent.
BHP lost 5.1 per cent to $50.10, Rio Tinto retreated 3.8 per cent to $152.68 and South32 subtracted 5.1 per cent to $4.27.
Gold fell as low as $US5,021 an ounce before rebounding to $US5,128 by about 5pm.
Goldminer Evolution fell 5.9 per cent while peer Northern Star dropped 6.2 per cent.
All of the big four banks finished deep in the red, with CBA falling 1.8 per cent to $169.45, Westpac losing 2.2 per cent to $40.10, ANZ dropping 2.3 per cent to $36.78 and NAB declining 1.6 per cent to $46.08.
Eleven of the 200 companies in the ASX’s main benchmark finished the day in the green, most of them in the energy sector.
Woodside rose 2.0 per cent, Karoon Energy grew 10.2 per cent and Yancoal advanced 13.3 per cent amid the spike in energy prices.
The losses leave the ASX200 down 1.3 per cent since the start of the year.
Mr McCarthy said many investors had made a lot of money out of buying dips in the market recently, but urged caution this time around.
“This might be the one that comes unstuck,” he said.
The Aussie dollar was buying 70.09 US cents, down from 70.32 US cents on Friday afternoon.
ON THE ASX:
* The S&P/ASX200 fell 252 points, or 2.85 per cent, to 8,599
* The broader All Ordinaries dropped 261.5 points, or 2.88 per cent, to 8,823.6
CURRENCY SNAPSHOT:
One Australian dollar trades for:
* 70.09 US cents, from 70.32 US cents at 5pm AEDT on Friday
* 111.04 Japanese yen, from 110.98 Japanese yen
* 60.63 euro cents, from 60.58 euro cents
* 52.60 British pence, from 52.64 British pence
* 119.06 NZ cents, from 119.11 NZ cents
AAP