Australian share markets delivered their strongest single-day gain in quite some time, with the ASX 200 today closing 2.55% higher at 8,951.80 points. This came after US President Donald Trump announced a two-week suspension of planned attacks on Iranian infrastructure conditional on the complete reopening of the Strait of Hormuz that was just the news markets had been hoping for.
The benchmark index reclaimed the psychologically significant 8,900 level on the way, and hitting an intraday high of 8,986.10, as risk appetite surged across global markets following the ceasefire announcement. The move represented a dramatic shift in sentiment, with breadth overwhelmingly positive across most sectors despite a sharp reversal in energy stocks that had been a key beneficiary of the closure of the Strait.
Today’s Movers on the ASX
ASX 200 Info Tech led the sector advance with a remarkable 7.31% gain, whilst Materials added 4.467%, Financials rose 2.77%, and Industrials climbed 2.89%. The ASX 200 Energy sector, however, suffered a brutal 7.15% decline as oil prices plunged as much as 16% intraday following the geopolitical developments.
High-beta growth names dominated the winners list, with gold stocks not far behind.
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Buy-now-pay-later provider Zip Co surged 19.46% to $2, whilst Bellevue Gold (ASX:BGL) jumped 18.85% to $1.86 as gold prices rallied more than 3% back above US$4,800 per ounce. Technology stocks WiseTech Global (ASX: WTC) and Life360 (ASX: 360) added 10.7%, and 11.88% respectively. Wealth platform HUB24 (ASX: HUB) advanced 10.9% to $91, and discretionary retailer Lovisa Holdings (ASX: LOV) climbed 12.23% to $24.04.
Decliners on the day were March’s winners
The energy complex bore the brunt of the sell-off as markets rapidly unwound the war premium that had driven crude prices higher over recent weeks.
Woodside Energy shares (ASX: WDS) plummeted 10.45%, whilst coal producers New Hope Corporation (ASX: NHC) and Whitehaven Coal (ASX: WHC) fell 9.4% and 5.3% respectively. Yancoal Australia (ASX: YAL) dropped 9.21% to $7.485, Viva Energy (ASX: VEA) fell 8.33%, Beach Energy (ASX: BPT) shed 7.31%, and Origin Energy (ASX: ORG) retreated 5.71% to $12.06.
Counter-drone specialist DroneShield (ASX: DRO) suffered the session’s steepest decline, tumbling 13.53% to $3.45 as markets sold down on news that CEO and Chairman are to step down.
The Ceasefire
President Trump’s announcement came after more than five weeks of escalating tensions following US and Israeli military operations against Iranian targets. The decision to pause planned infrastructure strikes was based on conversations with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, who brokered the temporary arrangement.
Trump declared the move would constitute a “double sided CEASEFIRE” and was conditional on Iran agreeing to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.” The strait, which carries roughly one-fifth of global seaborne oil and liquefied natural gas, had effectively been closed to commercial traffic during the conflict, driving a sharp spike in energy prices and raising fears of a global supply shock.
Iranian Foreign Minister Abbas Araghchi confirmed in a separate statement that ships would be able to safely transit the strait during the two-week interval “via coordination with Iran’s Armed Forces and with due consideration of technical limitations.” However, both sides framed the arrangement differently, with Tehran emphasising that the decision was made on its own terms.
The immediate market impact was dramatic. Oil futures collapsed from elevated levels as traders rapidly priced out the geopolitical risk premium that had accumulated during weeks of conflict. US equity futures shot higher overnight, setting the stage for Wednesday’s broad rally across Asia-Pacific markets.
Gold’s strength alongside equities suggested markets were adding risk whilst maintaining defensive hedges, a pattern typically associated with tentative optimism rather than outright complacency.
The rotation within the Materials sector was particularly notable, with gold miners rallying strongly whilst energy-linked names retreated. This internal divergence highlighted how quickly capital can shift when geopolitical narratives change, with positioning unwound across crowded trades that had benefited from the conflict premium.
What Happens Next?
The next fourteen days will prove critical for markets to assess whether the temporary ceasefire can transition into a more permanent arrangement under the emerging Islamabad Accord framework, or whether hostilities will resume. The conditional nature of the agreement leaves significant uncertainty, with both sides signalling differing interpretations of the terms.
For energy stocks, the near-term outlook has deteriorated sharply, whilst growth and technology names have moved in the opposite direction. The relief rally has restored momentum to high-beta stocks that had been sold down during the conflict period, with a reversal of the trade that had been taking place and working so well through March.
The airline and transport sectors stand to benefit materially from lower fuel costs, with Virgin Australia’s 11.96% gain to $2.575 illustrating how quickly markets price in operational margin improvements when input costs decline. This dynamic should also support Industrials more broadly if oil continues lower.
The rally’s breadth was encouraging, with gains across Financials, Materials excluding energy, Industrials, and Technology suggesting genuine risk-on appetite rather than narrow speculation. However, the sustainability of this advance will ultimately depend on whether the temporary ceasefire evolves into durable peace, allowing markets to refocus on underlying economic fundamentals rather than geopolitical tail risks.
