23-06-2025
ASX 200 sinks 0.6 per cent after the United States hit Iranian nuclear sites in major escalation of Middle East conflict
The ASX 200 has dived on Monday after the US struck Iranian nuclear facilities in a major escalation of the conflict in the Middle East.
The index is down 0.6 per cent in the first 30 minutes of trading with online furniture retailer Temple & Webster sinking 4.7 per cent, tech company Siteminder sliding 5.6 per cent and Neurem Pharmaceuticals plunging 4.5 per cent.
Despite the fall, energy and mining stocks have surged on Monday with Beach Energy adding 3.3 per cent, Karoon Energy jumping 3.4 per cent, Westgold Resources also up 3.4 per cent while defence company Austal is up 4.2 per cent.
Josh Gilbert, a market analyst at trading platform eToro, said investors were entering the week "with a heightened sense of caution" as they weigh the potential for further escalation.
"Volatility is set to pick up with bitcoin sliding below US$100,000, equity futures falling, gold spiking and gold moving higher. Until we see signs of de-escalation, this flight to safety will likely continue," Mr Gilbert said.
"That said, this kind of uncertainty is quickly becoming the new normal for markets, so I expect to see a relative sense of calm unless we see tensions keep rising, which, to be clear, it has the potential to do."
The strikes sparked concerns about whether Iran will block the Strait of Hormuz - the narrow waterway between the Persian Gulf and the Gulf of Oman which facilitates the transportation of about a fifth of the world's oil.
Saxo's head of commodity strategy Ole S. Hansen said the targeting of Iranian resources could trigger further oil price hikes.
'The mere threat of interference in the strait could delay shipments and trigger a sharper-than-expected short-term spike in prices, before easing amid a potential release of strategic reserves,' Mr Hansen said.
The price of oil shot up after Israel initially struck on Iran and has continued to climb over the past week.
On Friday, the Dow Jones finished up less than 0.1 per cent, the Nasdaq shed half a per cent and the S&P 500 sank 0.2 per cent.
London's FTSE 250 added 0.4 per cent, Germany's DAX jumped 1.3 per cent and the STOXX Europe 600 rose 0.1 per cent on Friday.
New Zealand's NZX 50 Index is flat on Monday while Japan's Nikkei 225 is down 0.7 per cent.
