The Australian sharemarket has bounced back, recovering approximately $50 billion in value after Monday’s substantial $90 billion wipeout. Energy stocks were notably dumped as oil prices stabilised around $US90 per barrel, following a surge towards $120. Fortescue completed its acquisition of Alta, while Air New Zealand withdrew its earnings guidance due to the ongoing Middle East conflict.
In international news, US President Donald Trump suggested that the conflict with Iran would not extend much longer, hinting at the possibility of easing sanctions on Russian oil. Australia is set to deploy early warning aircraft and Australian Defence Force personnel to the Middle East region in response to the escalating tensions.
Domestically, Reserve Bank of Australia (RBA) concerns about rising inflation expectations have been realised, hitting a three-year high. Governor Michele Bullock has expressed concerns that the Middle East conflict could further exacerbate inflationary pressures on prices and wages. Elsewhere, high net worth investors reportedly purchased shares in companies such as Credit Corp and DroneShield while selling off holdings in Zip and Woolworths during Monday’s market downturn.
