The Australian Securities Exchange (ASX) experienced modest gains on Thursday as energy stocks surged in response to new sanctions imposed by the White House. The benchmark ASX 200 increased by 2.8 points, or 0.03 percent, closing at 9,032.80, while the broader All Ordinaries index rose by eight points, or 0.09 percent, to reach 9,329.10. The Australian dollar also saw a slight uptick, now valued at 64.90 US cents.
Energy Sector Reacts to Sanctions
The energy sector was the standout performer, collectively rising by 3.19 percent as oil prices climbed. This rally followed the announcement of fresh sanctions targeting Russia’s two largest oil producers, Rosneft and Lukoil, along with their subsidiaries. As a result, the price of Brent crude oil increased by approximately 2.5 percent, reaching $64 (around $98) per barrel.
According to Carol Kong, Associate Director of International Economics at the Commonwealth Bank, the sanctions aim to intensify pressure on Russian President Vladimir Putin to halt the ongoing conflict in Ukraine. She noted that the European Union has also agreed on a new sanctions package targeting Russia.
In the stock market, several key players in the energy sector saw significant gains. Woodside Energy jumped 4.32 percent to $24.17, Santos Limited rose 2.22 percent to $6.45, and Ampol increased by 4.07 percent to $31.20.
Mixed Performance in Other Sectors
Despite the surge in energy stocks, the price of gold continued to decline, marking its third consecutive drop. Gold prices are approaching $4,000 (approximately $6,154.88) per ounce, as concerns grow that the recent rally may have become overheated. Chris Weston, Head of Research at Pepperstone, remarked on the unusual behavior of gold in the current geopolitical climate, likening it to a “meme stock.”
Consumer discretionary shares also contributed to the overall positive performance of the ASX. Shares of Wesfarmers rose 1.02 percent to $91.92, while Harvey Norman increased by 0.41 percent to $7.28, and The Lottery Corp closed up 0.36 percent at $5.62.
On a day when seven out of eleven sectors finished higher, the banking and technology sectors experienced declines. The Commonwealth Bank closed down 1.43 percent at $171.66, while Westpac fell 0.92 percent to $38.88. Other banks like NAB and ANZ also posted losses.
In corporate news, major iron ore miner Fortescue Metals saw its shares increase by 2.36 percent to $20.84, following the announcement of a 4 percent increase in first-quarter iron shipments, totaling 49.7 million tonnes. Conversely, shares in Super Retail Group fell 3.97 percent to $16.47 after the company reported a 2.6 percent increase in like-for-like sales for the first 16 weeks of the new financial year during its annual general meeting.
The overall sentiment in the market reflects a cautious optimism as investors navigate the impacts of geopolitical tensions and evolving economic conditions.
