Australia Shares Jump as Iran Talks Loom

Australian stocks climbed 107 points, or 1.3%, to 8,486 in Wednesday morning trade, extending gains for a second session amid a rally in U.S. equity futures. Sentiment was buoyed by reports that Washington, via Pakistan, had sent Iran a 15-point plan to end the Middle East conflict, with regional mediators awaiting Tehran’s response ahead of possible high-level talks Thursday. However, caution prevailed before the release of Australia's inflation data for February later today, after January’s reading held at 3.8% for a second month, above the Reserve Bank’s target and market forecasts. Most sectors advanced, led by non-energy minerals, logistics, consumers, and transport. Rio Tinto rose 1.7% after striking a deal to keep its Boyne aluminum smelter open, shifting toward renewable power to offset rising fossil fuel costs. Other notable movers included Evolution Mining (5.9%), Lynas Rare Earth (2.5%), BHP Group (2.3%), and Macquarie Group (2.1%).

The S&P/ASX 200 edged 0.2% higher to finish at 8,379 on Tuesday, surrendering part of its earlier gains as market sentiment softened following Iran’s denial of talks with the US. Washington postponed planned strikes on Iranian energy infrastructure by five days, citing talks with Tehran. However, Iran denied any negotiations, accusing the US of spreading misleading information that could distort global markets. Domestically, the manufacturing PMI fell to a five-month low of 50.1 in March 2026, while the services PMI contracted for the first time since January 2024, at 46.6. Meanwhile, the European Union and Australia sealed a free-trade deal, ending nearly a decade of talks to strengthen ties and uphold a rules-based order challenged by the Trump administration. Heavyweight mining stocks were among the top performers, namely BHP Group (3.4%), Rio Tinto (3%), and Fortescue (3.7%). In contrast, banking stocks led the declines, with CBA, Westpac, and NAB falling 1.1% to 4%.

The S&P/ASX 200 fell 0.7% to close at 8,366 on Monday, hitting its lowest level since May 2025, as intensifying geopolitical tensions continued to rattle market sentiment. Tensions in the Middle East persisted after US President Trump threatened to strike Iranian power facilities if the Strait of Hormuz remains closed, while Tehran responded with warnings that it would target key US and Israeli assets. Domestically, investors are awaiting Wednesday’s inflation report, with headline inflation expected to hold steady at 3.8%. The data follows the RBA’s narrowly split decision to raise the cash rate to 4.1%. It marked a second straight hike for the first time since mid-2023 and reversing two of last year’s three cuts, as the central bank seeks to curb persistent inflation. Mining stocks led the losses, particularly BHP Group (-1.1%) and Rio Tinto (-1.5%). Gold producers also underperformed, led by Newmont Corporation (-7.4%), Evolution Mining (-6.9%), and Northern Star Resources (-6.3%).