Energy stocks and gold miners are set to rally after an American strike killed Iran’s leader and left the Middle East on the brink of more serious conflict, with the only certainty being a rush for safe assets and a higher oil price.
Futures tied to the ASX 200 pointed to an opening fall of 0.2 per cent or a loss of 20 points to 9150 following a record-breaking close on Friday.
Despite the outbreak of missile and drone attacks across Iran, Israel and the Gulf – where the United States has several military bases – investors appear to be banking on a short conflict, with the only major market operating at the weekend, bitcoin, remaining buoyant despite the strikes.
“Bitcoin’s recovery suggests the market is already leaning toward a short, sharp shock rather than a drawn-out conflict,” Minotaur Capital co-founder Thomas Rice said. “If that’s right, you get a volatility spike that normalises within weeks. If it’s wrong and this escalates into a sustained campaign … the impact on global growth and risk assets is much more serious.”
Bitcoin had sunk 4 per cent on Sunday to $US63,000 ($88,530) as Iran launched counterstrikes on Israel, Qatar, the United Arab Emirates and Bahrain, but recovered after Iranian Supreme Leader Ayatollah Ali Khamenei was confirmed dead, suggesting optimism rather than bearishness.
Read more on Australian Financial Review
