Australian shares rose sharply, taking the S&P/ASX 200 to a five-month high as investors responded to signs of possible de-escalation in the conflict with Iran. The benchmark gained 126.50 points, or 1.40 percent, to close at 9,145.80, while the All Ordinaries advanced 133.50 points, or 1.45 percent, to 9,311.90.
The rally was driven largely by optimism surrounding United States-Iran peace discussions. President Donald Trump indicated that negotiations aimed at ending the war and reopening the Strait of Hormuz were continuing, giving markets a basis to price a lower risk of prolonged disruption to trade and energy flows.
Buying was broad across the market, with ten of the eleven sectors finishing higher. Technology, healthcare and financial shares led the advance, showing that the response extended beyond companies directly exposed to oil or the Middle East.
Large technology and healthcare names were among the strongest contributors, including CSL, Pro Medicus, Xero, WiseTech Global and NextDC. The major banks also recorded solid gains, with National Australia Bank advancing 3.00 percent and leading the group.
Oil prices remained firm despite the diplomatic optimism, with Brent crude trading near $85 a barrel as tension in the Middle East persisted. Energy producers Woodside and Santos rose, allowing the sector to participate in the broader market advance.
Company-specific concerns still produced sharp losses. Credit Corp fell 6.98 percent even after reporting a 12 percent increase in profit, as investors questioned whether the improvement could be sustained.
BHP declined 0.33 percent while unions prepared strike action over a pay dispute. Atlas Arteria lost 0.79 percent after abandoning plans to sell its German motorway assets, illustrating how operational and labor developments continued to override the positive market tone for some stocks.
The Australian dollar strengthened to 70.19 US cents alongside the equity rally. The session showed how quickly geopolitical expectations can reprice Australian assets, but the uneven company results also left the market dependent on further evidence that negotiations will reduce risks around the Strait of Hormuz and regional energy supply.
