Australian shares extended gains for the second consecutive session on Thursday, as investors responded positively to growing expectations of a peace agreement between the United States and Iran.
The S&P/ASX 200 Index rose 84.50 points or 1% to 8,878.1, with seven of the index’s 11 sectors trading higher.
The local market followed gains on Wall Street overnight after reports indicated Washington had presented a one-page memorandum that could pave the way for the gradual reopening of the Strait of Hormuz.
Iran is expected to respond to the proposal in the coming days.
The Materials sector led the advance, supported by strength in major mining stocks as iron ore prices continued to rise. Iron ore futures climbed 0.5% to US$111.45 a tonne, reaching their highest level since 8 October 2024.
BHP gained 3.8%, Rio Tinto added 3.2%, and Fortescue traded 3.7% higher.
Gold producers also rallied after gold prices surged 3% overnight, with Northern Star Resources up 4.4%, Evolution Mining adding 6.3%, and Newmont lifting 2.8%.
The Financial sector also strengthened, with Commonwealth Bank up 0.7%, Westpac adding 1%, and ANZ moving 0.8% higher. National Australia Bank slipped 1.3% after trading ex-dividend.
Real estate investment trusts were mostly firmer, with Goodman Group up 0.7%, Mirvac Group adding 0.3%, Scentre Group lifting 1.3%, and Lendlease finishing 1% higher.
The Energy sector was the weakest performer after Brent crude prices plunged 7.8% overnight amid optimism surrounding a potential end to the Middle East conflict.
Shares in Woodside Energy fell 4.2%, Santos dipped 3.3%, Beach Energy lost 2.7%, and Viva Energy closed 5.1% lower.
In company-specific news, Tabcorp plunged 23.5% after revealing it was being investigated by AUSTRAC over “serious concerns” relating to its ability to identify, mitigate and manage money laundering and terrorism financing risks.
Light & Wonder fell 8.3% after the gaming company reported first-quarter results that disappointed market participants, despite earnings growth of 5%.
Meanwhile, Orica rallied 7.6% after reporting first-half earnings before interest and tax rose 5% to $512 million.
On the bond markets, Australian government yields moved higher, with the 10-year yield rising 0.5% to 4.927% and the 2-year yield increasing 0.8% to 4.645%.
