Oil prices have buoyed the ASX on Monday with energy companies rallying after a shock attack in Israel by militant group Hamas on the weekend.
Oil prices soared on Monday as investors reacted to shock attacks by militant group Hamas in Israel which left hundreds dead over the weekend, with the Australian sharemarket advancing on the back of energy companies.
Smoke rises from an oil tank on fire after it was hit by a rocket from Gaza, near the Israeli town of Ashkelon, Israel.“Geopolitical crises in the Middle East have usually caused oil prices to rise and stock prices to fall,” said Ed Yardeni, president of Yardeni Research. “Much will depend on whether the crisis turns out to be another short-term flare-up or something much bigger like a war between Israel and Iran.
Gold miners Evolution , Northern Star and Newcrest also rallied as investors sought refuge in safe haven assets, buoying the mining sector . Rising oil prices could add to already high global inflationary pressures with investors still debating the odds of another rise in interest rates by the Federal Reserve this year. “Any extension of this to oil-producing countries, Saudi Arabia in the lead, could make the price of crude oil more expensive, with negative inflationary effects for the West and would mean higher rates for longer,” said Guillermo Santos, head of strategy at Spanish private banking firm iCapital.
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