Staff writers
Updated ,first published
Investors trod cautiously on the Australian sharemarket on Monday as talks between Washington and Tehran were initially clouded by a renewed threat from US President Donald Trump to strike Iran, although sentiment improved as talks progressed to a road map for peace.
WiseTech Global shares tanked, weighing down the tech sector, after reports that federal police are investigating its chairman Richard White over claims he exploited a woman’s immigration status and financial insecurity for sex and provided false information on a visa application.
The S&P/ASX 200 finished down 12.60 points, or 0.1 per cent, at 8816.10, following its modest 0.3 per cent gain last week when the looming peace deal was announced. Six of its 11 industry groups were in the red. The Australian dollar edged down 0.2 per cent to US69.99¢.
As the meetings between the two countries got underway on Sunday in Switzerland, Trump said in a social media post that he would strike Iran again if it doesn’t “immediately stop their highly paid PROXIES in Lebanon from causing trouble”.
The threat came after Tehran claimed on the eve of the talks that it closed the Strait of Hormuz again over Israel’s ongoing military campaign in Lebanon against the Iranian-backed Hezbollah militant group.
“A potential unravelling of the US-Iran Memorandum of Understanding, which remains incredibly fragile given the events over the weekend,” is one of the biggest risks to markets, warned Tony Sycamore, an analyst at IG in Sydney.
Oil prices jumped in early trade over the ructions, but fell back as investors welcomed signs of diplomatic progress. Brent crude slipped to $US79 a barrel, reversing an earlier gain of as much as 2.2 per cent, while West Texas Intermediate was near $US75.
“Encouraging progress has been made including the creation of a mechanism for further technical talks,” mediators Qatar and Pakistan said in a joint statement on Monday. The sides also established a communication line to avoid incidents and miscalculation, with the aim of ensuring safe passage for commercial vessels through the strait. Technical-level discussions will continue this week.
“In the very, very short term, yes, there would be positive sentiment to drive the markets still higher or oil prices lower, but do expect some more volatility to come back to haunt the markets over the next 60 days,” said Cusson Leung, chief investment officer for KGI Asia.
Energy stocks lacked direction as oil prices gave up their early gains, with oil and gas giant Woodside dropping 0.9 per cent, Santos flat and refiner Ampol and Viva Energy up 0.5 per cent and down 2.3 per cent, respectively. Yancoal slipped 0.8 per cent.
The mining sector was also mixed, with mining giants BHP (down 10.7 per cent), Rio Tinto (down 0.8 per cent) and Fortescue Metals (also down 0.8 per cent) all in the red. Gold miners climbed after spot prices for the precious metal rose following the progress in peace talks. Northern Star Resources gained 1.6 per cent and Evolution Mining jumped 3.4 per cent.
The big four banks all finished higher, with CBA and ANZ Bank both up 0.6 per cent, and Westpac and National Australia Bank both up 0.3 per cent.
The session’s biggest loser was WiseTech Global, with the software maker’s stock plunging 18.4 per cent to its lowest in five years. The AFP’s human exploitation taskforce launched its investigation following a complaint by former Kyckr chief executive Kathy Phelan, who alleged White used a company letterhead to fraudulently sponsor Caroline Heidemann, a Brazilian once employed by WiseTech as a cleaner, for a visa. White is also alleged to have used his power and influence to coerce Heidemann into a sexual relationship.
This masthead is not suggesting White is guilty of human exploitation or providing false visa documents, only that he is being investigated over these claims by the AFP. The AFP, White and Phelan declined to comment as did Heidemann, through her lawyers.
WiseTech shares have slumped by almost two-thirds over the last 12 months, amid concerns about White’s private life and a broader software makers’ sell-off over worries that increasingly sophisticated AI tools will be able to replicate many of their functions. Xero, the next-biggest software maker on the ASX, slumped 4.5 per cent.
Chicken giant Inghams plunged 4.8 per cent amid concerns about the spread of bird flu in Australia after authorities confirmed the detection of the H5N1 avian influenza strain in two wild birds in Western Australia. As a precaution, the poultry producer said this morning it has implemented a complete lockdown across all its farms and processing operations in the state.
SGH shares climbed 3 per cent after the Kerry Stokes-backed company, which owns WesTrac, Boral and Coates and has a 20 per cent stake in Seven Network owner Southern Cross Media, announced a buyback of up to $500 million worth of its shares over the next 12 months.
Metcash, the owner of the IGA supermarkets, fell 1.9 per cent after saying its full-year net profit slipped 1.5 per cent to $279.1 million as sales edged up just 0.7 per cent. Earnings from its food business, which includes IGA, rose 5.4 per cent, but its hardware and liquor divisions struggled.
In New York, with US cash markets closed for the Juneteenth holiday on Friday, S&P 500 futures declined 0.6 per cent this morning, pointing to losses when Wall Street starts its week.
The US benchmark posted its best week last week since the end of May. The latest developments are a test to the optimism that has seen a technology-led rally in stocks gain further momentum after the US and Iran lifted their months-long dual blockade of the Strait of Hormuz late last week.
“Of course, with Trump there can always be some derailment along the way, but we believe that we’re set into a new phase of de-escalation,” said Alexandre Drabowicz at Indosuez Wealth Management. He advised investors not to rush to conclusions about a permanent deal.
UK gilts led a broad advance in European bond yields after Greater Manchester Mayor Andy Burnham won a seat in parliament, handing him a pathway to challenge Prime Minister Keir Starmer for his job. Investors are debating whether a Burnham premiership might shift to a looser fiscal policy.
The pound slid towards a fresh low for the year amid speculation about Starmer’s looming exit, which was confirmed after the close of trading on the ASX.
With Bloomberg, AP
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