The Australian share market suffered a sharp sell-off on Monday, with the ASX 200 closing down 2.9% as Brent crude oil prices surged 25% to over $US115 a barrel. The broader All Ordinaries index also fell 2.9%, erasing about $90 billion in value after briefly losing $130 billion at its lowest point.
The decline was the worst since the post-'Liberation Day' sell-off in April last year. The ASX 200 finished at 8,599 points, wiping out all gains for 2025 and leaving the index down 1.3% year-to-date. Energy stocks were the only bright spot, with Yancoal surging 13.3%, Karoon Energy up 10.2%, and Whitehaven Coal gaining 4.4%. Oil and gas giants Santos and Woodside rose 2.4% and 2% respectively.
IG market analyst Tony Sycamore noted, 'The violent reaction stems from the markets seeing no obvious off-ramp in the escalating Middle East conflict, now a high-stakes stand-off where neither side appears willing to blink first.' Global bond yields rose on expectations central banks may hike interest rates to combat a new energy shock and rising inflation.
Regional markets also suffered heavy losses, with Tokyo's Nikkei down 6.6% and Seoul's Kospi 200 falling 6.5%. Hong Kong's Hang Seng declined 2.4%, while Shanghai slipped 0.9%. US President Donald Trump described the oil price spike as a 'very small price to pay' for 'safety and peace' in a social media post.
Mining giants BHP and Rio Tinto dropped 5.1% and 3.8% respectively amid concerns over Chinese inventory builds. The ASX 200 bank index lost about $13 billion in value, while airline and travel stocks continued to slide on fears of rising fuel costs and falling demand.
