Australian fund managers anticipate an official peace agreement between the United States and Iran could trigger a significant global equities surge, potentially propelling the local sharemarket to record levels. The S&P/ASX 200 Index has climbed just 1.7 per cent this year, lagging behind double-digit growth in the US and Asia, despite recent optimism. News of a nearing agreement, which includes proposals to reopen the Strait of Hormuz and lift American blockades, has already spurred rallies on Wall Street and pushed Asian markets to all-time highs.
Jun Bei Liu, a portfolio manager at Ten Cap, projects a 4 to 5 per cent gain for the ASX, noting its need to catch up. She cautioned, however, that this surge might be more constrained than past recoveries due to pressure on cyclical sectors, exacerbated by the Reserve Bank of Australia’s recent interest rate hikes. The RBA raised rates to 4.35 per cent this week, diverging from global peers. Charles Casey, a portfolio manager at Solaris, expects a more modest recovery, suggesting positive news is partly priced in, with a sharper rebound requiring the RBA to temper its inflation stance.
Despite domestic challenges, Jason Kururangi, a portfolio manager at Milford, believes Australia’s sharemarket is well-positioned. Its focus on mining and industrial stocks offers a distinct growth path from overseas tech-driven gains. Kururangi anticipates the resources sector will drive recovery, drawing investment into major companies. Liu expects a shift from “safe” defensive stocks towards gold and copper producers. Travel companies such as Qantas and Flight Centre could also see an immediate lift, though its duration may be limited by high prices and tighter household budgets. Fund managers are hopeful peace deal momentum could reset the ASX 200’s all-time high.
