ASX Futures and Shares Experience Dramatic Surge in March Amid Global Conflict
Futures trading on the ASX more than doubled in March, highlighting the intense volatility sparked by the ongoing Middle East war. This turbulence has also delayed proposed fundraising efforts by Western Australian resources companies, according to the latest monthly activity report from the ASX released on Wednesday.
Investor Activity Reaches Unprecedented Levels
The report reveals that futures trading volumes surged by over 120% compared to February, with a 52% increase year-on-year to 34.33 million contracts in March. This spike includes bets on interest rates, commodities, ASX indices, and energy markets. Trading in options on futures soared by an astonishing 144%, underscoring the heightened speculative activity.
Meanwhile, share trading volumes rose by a more modest 9% in March compared to the previous month. However, over the past 12 months, these volumes have skyrocketed by 46%, reflecting both the record performance of the S&P-ASX200 and the prolonged market instability.
Impact of Middle East Conflict on Market Dynamics
Since the US and Israel launched attacks on Iran in late February, stock values and oil and gas prices have experienced daily whipsaw movements. This has left investors increasingly uncertain about investment timing and strategies, as they navigate risks from the war and overnight social media posts by US President Donald Trump.
Investors are trading shares at an unprecedented pace, aiming to avoid being caught off-guard by sudden market shifts. The volatility has sidelined many corporate transactions, with brokers and advisers noting that companies seeking cash for expansion or acquisitions are delaying deals due to pricing uncertainties linked to cost fallouts from the conflict.
Fundraising Trends and Ceasefire Implications
Secondary fundraisings by ASX-listed companies through rights issues or share placements remained stronger than in March last year, with total amounts raised jumping 58% year-on-year to $2.9 billion. However, this figure is significantly lower than February's $4.09 billion, resulting in a 23% decline for the financial year-to-date compared to 2025.
A recent two-week ceasefire agreement between the US and Iran has provided temporary relief, reopening the Strait of Hormuz and easing global energy price pressures. This led to a spike in share prices and a fall in oil prices on Wednesday. Yet, the ceasefire appears fragile, with both nations far apart on their demands, and it potentially leaves Iran's Armed Forces in control of the strategic waterway, charging fees for passage.
Long-Term Energy Market Concerns
MST Financial energy analyst Saul Kavonic warns that oil markets will continue to price in heightened risk for the Strait of Hormuz, even with a peace deal. He predicts that Iran may feel emboldened to threaten the strait more frequently in the future, leading to long-term implications for global energy users and prices.
Given the damage to Middle East energy infrastructure, Kavonic foresees oil prices stabilizing around $US80 per barrel rather than $US60, even in more bearish scenarios. This could further undermine energy security in countries like Australia, threatening elevated costs for businesses and consumers.
Investors remain wary of volatility and uncertainty, with the ceasefire offering only a temporary reprieve. The ongoing conflict continues to shape market behavior, driving record trading activity as participants grapple with an unpredictable geopolitical landscape.
