ASX 200 news today ASX 200 plunges on Middle East tensions while energy stocks rally
Australian shares plunged on Monday after oil prices jumped because of the conflict in the Middle East which raised fears of a breakout in global inflation.
The benchmark S&P/ASX 200 at the time of writing was down 3.73%.
The selloff is linked to disrupted oil supplies which are the single largest contributor to global inflation because higher oil prices raise the cost of many goods and services such as petrol, groceries, utilities and travel.
A key concern is the closure of the Strait of Hormuz through which about 20% of the world’s oil supply passes.
West Texas Intermediate oil prices jumped by 22% which briefly pushed prices above US$111 per barrel which is a level last seen during the Russia-Ukraine conflict in 2022.
This rise came from fears of disrupted oil supplies because of attacks on key infrastructure and possible production cuts in the Persian Gulf.
US stock futures fell while the US dollar strengthened against currencies of oil exposed regions.
Australian 10-year bond yields also rose to 4.95% as investors fear the upside inflation risk from high oil prices.
Most stocks on the ASX fell on Monday. The energy sector was the main exception because higher oil prices benefit these companies.
Several ASX energy and resources companies moved higher on Monday. These include Yancoal Australia, Santos, New Hope Corporation, Beach Energy and Woodside Energy Group.
Yancoal Australia Limited (ASX: YAL) at the time of writing was the strongest performer among them as the stock rose about 11% which made it the best performing company in this group.
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