‘Not priced in’: ASX falls on US-Iran war

US strikes on Iran have rattled Australia’s sharemarket, while energy and gold stocks rallied.

The ASX 200 slid 38.50 points or 0.42 per cent to 9,160.10 by 1pm, as the outbreak of a Middle East conflict dented investors’ confidence.

Australia is not alone, with global equities poised to drop. Large net energy importers such as Japan, China and India are at risk of the biggest hit.

Limiting the falls on the ASX was a jump in energy stocks as they soared 3.78 per cent.

In a joint operation over the weekend, the US along with Israel launched “pre-emptive strikes” on Iran, including an operation that killed Iranian Supreme Leader Ayatollah Ali Khamenei and at least 40 of his senior officials, according to US President Donald Trump.

The large‑scale US and Israeli attack on Iran significantly raises the risk to global energy supply.

Immediately following the attacks, the price of oil soared, with crude oil jumping 15.13 per cent to $US77.44 ($A108) a barrel.

On Monday it continued to run higher, trading at $US82.37 ($A116) a barrel.

Capital.com senior financial market analyst Kyle Rodda said global markets had not priced in comprehensive strikes on Iran.

“Oil looks poised to surge today, with gold also prepared to jump,” he said.

“The impact could have shades of the Russian invasion of Ukraine, albeit with a more modest impact on global economic fundamentals because of Iran’s size and relative isolation from the world economy,” he said.

Wood Mackenzie senior vice-president of refining, chemicals and oil markets Alan Gelder warns that the price of oil could jump to above $US100 ($141) a barrel.

“No doubt, tanker rates and insurance will increase dramatically, but these costs would only be a small part of the oil price impact associated with a curtailment of oil flows if they last for more than a few days,” Mr Gelder said.

Gold futures also jumped 2 per cent to a new four-week high of $US5200 per ounce, while the price of silver rallied 8 per cent to $US112.03 an ounce.

The Australian dollar also dropped 1.1 per cent to a four-day low of 70.36 US cents.