Australian sharemarket soars to two-month high after US-Iran peace deal hammers oil prices

The Australian sharemarket has soared to a two-month high after the US and Iran brokered a peace deal in the Middle East — with the price of oil dropping to a three-month low.

The benchmark ASX 200 index gained 110.00 points, or 1.25 per cent, to finish the session at 8914.00 points.

The broader All Ordinaries rose by 1.35 points, or 1.35 per cent, to close at 9128.00 points.

The Australian dollar rose 0.4 per cent at US70.71c.

The index added over 100 points on a mixed day of trading — with only six of the 11 sectors finishing higher, led by Materials and the big four banks.

The market was dominated by news out of the Middle East, with a peace deal leading to a slump in the oil price as well as surging commodity prices.

Brent crude fell 4.3 per cent towards $US83.59 ($A118) a barrel, which is its lowest price since March.

Gold producers dominated the ASX 200 top five, with Bellevue Gold rising by 13.38 per cent, selling at $1.53 and hitting a high of about $US4335 (A$6128).

It was also a strong day for the major iron ore miners, as BHP rallied 3.58 per cent to $65.18, Rio Tinto jumped 2.71 per cent to $189.31 and Fortescue closed 3.02 per cent higher at $20.82.

Australia’s big four banks also drove the market higher, with Commonwealth Bank up 1.43 per cent to $161.79, Westpac added 0.91 per cent to $35.32, NAB rallied 2.63 per cent to $37.46 and ANZ closed one per cent higher to $34.51.

IG market analyst Tony Sycamore said after a number of false starts around the signing of the peace deal, confirmation on Monday sent the ASX skyward.

“Overall it’s been a pretty thumping rally today for the ASX 200 so it’s starting to break some pretty important levels and look quite good,” he said.

Mr Sycamore said gold rallied strongly, as did copper and iron ore which “really put a rocket under the material sector” after a worrying time last week.

“If we can get the reopening of the straight (of Hormuz) it’s a good sign for global growth and it’s a really good sign for our big miners so they’ve had a very strong day today,” he said.

Offsetting the gains was a slump in the energy prices, which were hammered on falling oil prices.

The energy sector took a hit on Monday, dropping by 5.06 per cent.

“Overall it’s really seen the energy sector absolutely pummelled and after a good run you’d have to assume that for now a lot of heat has come out of that market,” Mr Sycamore said.

“Over the next 60 days a lot can go wrong. Even over the next five days a lot can go wrong, which is when the ceasefire’s meant to be signed in Switzerland but for the time being it’s been a pretty savage reaction in the energy sector.”

Utilities also dropped by 1.81 per cent, telecommunication services dropped by 1.20 per cent and consumer staples fell by 0.95 per cent.

In company news, Sigma Healthcare shares soared 6.4 per cent to $2.81, after it told the market it was not going to buy UK pharmacy giant Boots.

The ASX has agreed to a $20.5m penalty, and to pay $3m of the Australian Securities and Investments Commission’s costs, in a deal announced just hours before a trial was due to start in the Federal Court.