ASX bounces back on renewed Iran talk hopes; BHP jumps on China concessions

The Australian sharemarket advanced on Tuesday as US President Donald Trump raised hopes for an Iran deal even as a blockade of the Strait of Hormuz took effect. BHP climbed amid reports of progress in its iron ore stand-off with China, while Qantas fell after a profit warning due to the war.

The S&P/ASX rose 44.8 points, or 0.5 per cent, to 8970.80, with six of its 11 industry sectors in the green. The bounceback comes after the local bourse fell 0.4 per cent on Monday following a poor showing by tech stocks, and as investors reacted to news of the failed peace talks between the US and Iran, and Trump’s vow to blockade the crucial oil passageway.

The Australian dollar traded at US70.91¢ as of 4.49pm AEST.

BHP, the world’s biggest miner, powered gains on the local exchange, gaining 3.2 per cent after Bloomberg reported China’s state-backed iron ore buyer has told steel mills in the country they are allowed to purchase some of its cargoes, an apparent concession in their months-long dispute.

Officials from China Mineral Resources Group told plants they can resume bidding for some BHP cargoes denominated in US dollars from Tuesday, according to people familiar with the matter. BHP and CMRG have been locked in a tug-of-war over the terms of long-term iron ore contracts since September. The apparent easing in CMRG’s position follows a visit to China by Brandon Craig, BHP’s incoming chief executive officer. China is the Big Australian’s most important customer.

BHP’s rivals also advanced, with Rio Tinto up 1.3 per cent and Fortescue gaining 1.6 per cent. Uranium producers rallied, with Paladin Energy up 6.3 per cent and Deep Yellow jumping 9 per cent following their recent declines.

Tech stocks bounced higher, reversing their losses from Monday, helped by the renewed hopes that a resolution of the Iran war will limit the damage on the world economy. Software firms WiseTech Global and Xero rallied 3.8 per cent and 3.9 per cent, and data centre operator NextDC was also up 4.3 per cent. Data centre owner Goodman Group (up 1.6 per cent) and shopping centre landlord Scentre (up 1.4 per cent) drove gains for real estate investment trusts.

Qantas opened sharply lower but pared its declines to 0.3 per cent after the company raised its fuel cost outlook and delayed a planned share buyback, citing sharply higher jet fuel prices since the war in the Middle East cut oil supply. The airline said jet fuel prices have more than doubled, lifting its estimated fuel bill for the second half of fiscal 2026 to between $3.1 billion and $3.3 billion, up from its prior forecast of $2.2 billion.

Westpac shed 2.6 per cent. The nation’s second-largest lender raised its provisions for potential bad loans to 10 basis points of average gross loans, up from 6 basis points previously, saying an “expected slowing in economic growth” due to the war “will create a more challenging environment for some customers”. It also warned its first-half profit would take a $75 million hit from the sale of its RAMS mortgage portfolio.

Oil and gas giants Woodside (down 0.6 per cent) and Santos (down 0.9 per cent) declined as the oil price eased on signs Washington and Tehran may revive peace talks following the start of a US blockade. West Texas Intermediate fell near $US97 a barrel, while Brent dropped below $US99. The two sides are in discussions on holding another round of face-to-face negotiations for a longer-term ceasefire before their two-week ceasefire expires on April 22, sources said.

Cleanaway lost 2.6 per cent after the waste management company cut its earnings forecast for this year by $20 million due to higher fuel and logistics costs as a result of the war.

On Wall Street overnight, US stocks closed at session highs and were back in the green for 2026 after Trump said Iran still wanted to make a deal following a deadlock in peace talks and his blockade of the strait. The S&P 500 rose 1 per cent to its highest level since late February.

The gains were helped by the oil market, where prices briefly jumped over $US100 per barrel after 21 hours of peace talks failed over the weekend, but then pared their leaps as the session progressed.

The moves followed Trump’s claim that Iran had reached out to his administration on potential peace talks, as the US began its naval blockade of the Strait of Hormuz in the war’s seventh week. Iranian President Masoud Pezeshkian, meanwhile, said that the country was prepared to continue peace talks solely within the framework of international law and regulations.

“The markets really want to give peace a chance, accentuating the positives and downplaying the negatives as tensions between the US and Iran simmer away,” said Kyle Rodda, analyst at Capital.com. “Despite this, the risk for further volatility remains high, with headline risk continuing to drive the action.”

And, as with so many pronouncements made so far in the US-Iran war, much will depend on the details of the blockade and exactly what gets restricted.

“Not all blockades are created the same,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

Trump said on Monday on his social media platform that “34 Ships went through the Strait of Hormuz yesterday, which is by far the highest number since this foolish [Iran] closure began.”

In the meantime, big US companies are beginning to tell investors how much money they made during the first three months of the year. Strong reports could help make up for worries about the Strait of Hormuz on Wall Street because stock prices tend to follow the trend of corporate profits over the long term.

Investment bank Goldman Sachs said it made $US5.63 billion in profit in the latest quarter, more than expected. But analysts pointed to some potentially concerning signals including lower revenue from the trading of fixed income, commodities and currencies. Its shares fell 2.3 per cent.

Oracle’s gain of 11.2 per cent was the biggest in the S&P 500, which helped it recover some of its sharp loss for the year so far on worries that it may be spending too much to build up its artificial-intelligence capabilities.

In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury remained at 4.31 per cent, where it was late on Friday.

With AP, Reuters, Bloomberg

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