The COB: Safe-Haven Slide

Why It Matters

Rising oil and geopolitical risk are fueling inflation and market volatility, increasing the likelihood of RBA tightening and favoring energy and yield‑focused assets while weighing on consumer‑sensitive sectors. This mix raises borrowing costs and could compress equity returns, reshaping portfolio positioning ahead of imminent policy moves.

Summary

Australia’s share market slipped about 0.4% near the close as miners and gold stocks led declines while energy names rallied. Oil surged above $100 a barrel—up roughly 40% in a month due to Middle East tensions and a drone attack on Dubai—lifting energy stocks even as gold weakened on a stronger US dollar. The ASX has given back more than A$200 billion from a recent record high amid mounting inflationary pressures and an anticipated RBA rate hike. Key corporate moves included a A$35 million court penalty for Macquarie Securities, Perpetual’s A$500 million sale of its wealth arm to Bain Capital, South32 placing its Mozal smelter on care and maintenance, and Woodside delaying low‑carbon ammonia production in Texas.

Original Description

The local market started the week on a negative tone, as investors continued to monitor the war in the Middle East, and ahead of an expected RBA hike tomorrow.

The S&P/ASX 200 closed Monday's session lower by 0.39% to 8,583.40 points. 

Gold slid under US$5,000 on a strengthened greenback. Gold stocks continued their descent with Northern Star 5.4% lower. 

Iron ore stocks also came under pressure as China’s state-sponsored iron ore trader said it would temporarily ease restrictions on BHP’s exports. The mining giant shed 1.2%. And South 32 dropped 5.7% after placing its Mozal aluminium smelter on maintenance due to power supply concerns.

Lynas Rare Earths was a spot of green among the miners. It inked a new supply deal for the US, inclusive of price floors. 

Meanwhile, energy stocks maintained their gains despite the International Energy Agency flagging oil reserves will be released in Asia. Coal stocks gave back some ground however. 

In corporate news, Perpetual announced it will sell its wealth management business to Bain Capital Private Equity for $500 million. Shares rose 1.8%. And shares in Telix Pharmaceuticals fell 2.8% as it confirmed it will resubmit a brain cancer drug application to the US regulator.

Tomorrow, the RBA is expected to lift the cash rate to 4.10%, as inflation concerns followed a rise in oil prices.