Oil price jump fails to lift Australian sharemarket as Middle East conflict hits banks

Oil prices jumped and the Australian sharemarket traded flat as tensions between the United States and Iran returned to the fore.

The benchmark ASX 200 eked out a tiny 6.4 point or 0.07 per cent gain to 8,953.30, while the broader All Ordinaries finished up 5.40 points or 0.06 per cent to 9174.10.

Australia’s dollar added 0.24 per cent to buy 71.51 US cents.

On a mixed day of trading, six sectors rose while five of them traded in the red.

Leading the falls were energy stocks, even though the price of Brent Crude leapt by as much as 8 per cent on Monday before settling at $US95.50 ($A133.30), as the US seized Iranian ships in the critical Strait of Hormuz.

Woodside shares fell 2.93 per cent to $31.77, Santos dropped 1.31 per cent to $7.55 and Ampol slumped 3.19 per cent to $31.88.

Offsetting falls in the energy markets were consumer facing stocks and the financials sector.

Retail juggernaut Wesfarmers jumped 2.44 per cent to $74.63, JB Hi Fi added 0.55 per cent to $76.49 and Harvey Norman appreciated by 0.88 per cent to $4.61.

Commonwealth Bank shares jumped 1.08 per cent to $180.15, Westpac added 0.73 per cent to $40.02 and ANZ nudged 0.03 per cent higher to $37.93.

Meanwhile, National Australia Bank shares slumped 3.60 per cent to $41.02 after telling the market it has increased its provisions for bad debts ahead of its first-half results due to the US/ Israel and Iran war.

The bank is flagging up to $706m in impairment costs, compared to $485m before the war began.

Also weighing on the market was a report that US Vice President JD Vance would join a delegation travelling to Pakistan for peace talks in Pakistan, but Iranian state media suggests that Tehran will not attend these talks.

IG market analyst Tony Sycamore said markets are in a holding position as they await more news out of the US and Iran war.

“Either the data will break or the blockade will break,” he said.

“When you talk about the data breaking, we aren’t at that point although Japan, New Zealand and the UK inflation will give an indication.

“We also have the ceasefire coming up and I don’t think anyone thinks the ceasefire won’t be extended.”

In company news, Viva energy shares slumped 9.09 per cent to $2.30 after it commenced trading on Monday following last week’s fire at its Geelong refinery.

Worley shares also slumped 5.84 per cent to $11.13 after it warned the engineering group warned the conflict in the Middle East would delay its operational and contract awards impacting its FY 26 financial outlook.

Zip continued its run higher on Monday up 7.73 per cent to $2.51 after a quarterly update on Friday showed a 41.5 per cent jump in third quarter cash earnings before interest and tax thanks largely due to growth in US revenue. On Friday the buy now pay later provider rallied 13.66 per cent to $2.33.