The airline facing a double-whammy after Trump's bunker busting
And sometimes, travellers will even postpone during periods of increased risk.
Virgin is an overwhelming domestic airline, but it did introduce one international route from Australia to Doha two weeks ago. Any disruption of this route won't have much (if any) impact on Virgin's profit numbers this year but an elevated oil price, even in the short to medium term, will.
Shares in Virgin's domestic competitor Qantas were down more than 2.7 per cent on Monday morning in what was a clear response to the US's escalation of the Middle East war over the weekend.
It isn't just airline stocks that feel the effects of geopolitical tension: stock and bond markets also respond negatively to risk.
Australia's market is the first major market to open since the bunker-busting bombs were dropped on Sunday (our time) and as such, we are a bit of a taste-tester for how larger markets will react.
The ASX 200 was off by around 0.8 per cent – a response that realistically could have been far worse. The index is still sitting not too far off the record high it hit a few weeks ago.
Other than airline stocks that are considered at the riskier end of the spectrum, sectors such as technology were disproportionately hit, but nothing calamitous.
Our largest oil and gas company, Woodside, started the day strongly but it was trading flat by early afternoon.
If this pretty muted response is mirrored in the US and European markets, it suggests that investors are largely taking events in their stride.
Short of a serious escalation, the markets seem happy for now to assume that the worst is over.
At the time of writing, US S&P futures were down 0.3 per cent, well within the parameters of normal daily volatility.
Oil prices have certainly risen over the past 36 hours but fears that the price of crude could skyrocket have not been realised – at least not yet. And the price of gold initially bounced, but it has now re-entered the atmosphere.
Short of a serious escalation, the markets seem happy for now to assume the worst is over.
Whether this is true largely depends on whether oil shipping lines are affected, which depends on the response from Iran – whether it has the stomach, or even the capacity, to retaliate.
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There are also question marks over the extent of the damage from the US attack on Iran's nuclear installations. Trump said the sites had been obliterated, but independent agencies have not confirmed this.
There are, as always, plenty of political and market analysts issuing worst-case scenario warnings about the collapse of markets, or the potential for gold and oil prices to surge into the stratosphere.
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Perth Now
2 hours ago
- Perth Now
ASX falls to three-week low on Iran fears
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News.com.au
2 hours ago
- News.com.au
ASX200 falls on latest Israel-Iran tensions
The Australian sharemarket slipped to a three-week low on Monday, despite Commonwealth Bank reaching a new record high, on the back of fears an Iranian response to the US bombing could see the price of crude oil skyrocket. On a volatile day of trading, the benchmark ASX200 fell 30.6 points or 0.36 per cent to 8,474.9 on Monday – its lowest point since June 3 – although it rallied from down nearly 1 per cent during the afternoon's trading. The broader All Ordinaries also slumped, down 35.50 points or 0.41 per cent to close the session at 8,688. The Aussie dollar also fell on the news out of Iran and is now buying US64.18c. On an overall volatile day, eight of the 11 sectors finished in the red, with financials and the energy sector leading the way. IG market analyst Tony Sycamore said the sell-off was in line with US futures on well-founded fears after the US conducted strikes with B-2 Stealth Bombers on three Iranian nuclear sites over the weekend. 'The US insists the strikes were aimed at halting Iran's nuclear ambitions, not regime change, but Trump's rhetoric suggests openness to further action, Mr Sycamore said. 'You would have been forgiven for thinking we would have a really volatile session on Monday. 'Whether it's just caution or because we have seen nothing from Iran just yet to shake things up further … we are in a hold until we know more.' One of the bright spots on the ASX was the financial sector, with Commonwealth Bank hitting a fresh record high of $184.41, before closing up 1 per cent to $184.35. Mr Sycamore said Commonwealth Bank remains a 'juggernaut that steamrollers people.' 'I don't know where it stops and when it stops but it's the best of the banks and that is the sector where people want to be,' he said. Overall, it was a mixed day for the major banks, with Westpac closing up 0.63 per cent to $33.42. National Australia Bank slipped on the bell, down 0.08 per cent to $38.88 and ANZ dropped 0.63 per cent to $28.21. Energy stocks, which initially bounced on the opening bell, trimmed their earlier gains in line with the oil price but still closed the day in the green. Takeover target Santos closed 1 per cent higher to $7.78 while Woodside Energy traded flat and Ampol gained 0.47 per cent to $5.86. Iron ore miners continued their weakness with market heavyweight BHP slumping 1.57 per cent to $35.64, Rio Tinto dropping 0.33 per cent to $101.83 and Fortescue Metals sliding 1.02 per cent to $14.54. In company news, shares in Australia's largest airline Qantas fell 1.85 per cent to $10.08 on the back of higher oil prices. Discounted retailer The Reject Shop announced shareholders had overwhelmingly voted in favour of a $259m takeover by Canadian discount retailer Dollarama at a meeting on Monday. Homewares and furniture retailer Adairs plunged 20.5 per cent to $2.05 after telling the market that full-year earnings would come in below last year's.
West Australian
2 hours ago
- West Australian
ASX200 falls on latest Israel-Iran tensions
The Australian sharemarket slipped to a three-week low on Monday, despite Commonwealth Bank reaching a new record high, on the back of fears an Iranian response to the US bombing could see the price of crude oil skyrocket. On a volatile day of trading, the benchmark ASX200 fell 30.6 points or 0.36 per cent to 8,474.9 on Monday – its lowest point since June 3 – although it rallied from down nearly 1 per cent during the afternoon's trading. The broader All Ordinaries also slumped, down 35.50 points or 0.41 per cent to close the session at 8,688. The Aussie dollar also fell on the news out of Iran and is now buying US64.18c. On an overall volatile day, eight of the 11 sectors finished in the red, with financials and the energy sector leading the way. IG market analyst Tony Sycamore said the sell-off was in line with US futures on well-founded fears after the US conducted strikes with B-2 Stealth Bombers on three Iranian nuclear sites over the weekend. 'The US insists the strikes were aimed at halting Iran's nuclear ambitions, not regime change, but Trump's rhetoric suggests openness to further action, Mr Sycamore said. 'You would have been forgiven for thinking we would have a really volatile session on Monday. 'Whether it's just caution or because we have seen nothing from Iran just yet to shake things up further … we are in a hold until we know more.' One of the bright spots on the ASX was the financial sector, with Commonwealth Bank hitting a fresh record high of $184.41, before closing up 1 per cent to $184.35. Mr Sycamore said Commonwealth Bank remains a 'juggernaut that steamrollers people.' 'I don't know where it stops and when it stops but it's the best of the banks and that is the sector where people want to be,' he said. Overall, it was a mixed day for the major banks, with Westpac closing up 0.63 per cent to $33.42. National Australia Bank slipped on the bell, down 0.08 per cent to $38.88 and ANZ dropped 0.63 per cent to $28.21. Energy stocks, which initially bounced on the opening bell, trimmed their earlier gains in line with the oil price but still closed the day in the green. Takeover target Santos closed 1 per cent higher to $7.78 while Woodside Energy traded flat and Ampol gained 0.47 per cent to $5.86. Iron ore miners continued their weakness with market heavyweight BHP slumping 1.57 per cent to $35.64, Rio Tinto dropping 0.33 per cent to $101.83 and Fortescue Metals sliding 1.02 per cent to $14.54. In company news, shares in Australia's largest airline Qantas fell 1.85 per cent to $10.08 on the back of higher oil prices. Discounted retailer The Reject Shop announced shareholders had overwhelmingly voted in favour of a $259m takeover by Canadian discount retailer Dollarama at a meeting on Monday. Homewares and furniture retailer Adairs plunged 20.5 per cent to $2.05 after telling the market that full-year earnings would come in below last year's.
