Gold miners and industrial businesses like Brambles and Cleanaway Waste are tipped to be significant beneficiaries on the Australian share market should oil flow eventually resume through the Strait of Hormuz. Equities globally rallied earlier this week as oil briefly dropped below US$100 a barrel, driven by the prospect of a US-Iran peace deal that could reopen the crucial waterway, which has been largely closed since the Middle East conflict began three months ago. However, conflicting reports, including renewed US air strikes and White House denials of a deal, have triggered wild swings in oil prices and seen the S&P/ASX 200 Index decline by approximately 1.8 per cent.
Despite the volatility, fund managers anticipate an eventual peace agreement. Emanuel Datt, founder of Datt Capital, is betting on a rebound for gold producers, including Newmont, Northern Star, Vault, and Ramelius. Gold stocks, which performed strongly last year, have shed 16 per cent since the conflict started, with bullion trading at a two-month low as some countries liquidated reserves to cover higher energy costs. Datt also expects weaker fuel prices to reduce operating costs for logistics-dependent industrial businesses like Brambles, a global logistics company providing reusable pallets, crates, and containers, and Cleanaway Waste, Australia’s largest waste management company offering collection, processing, and disposal services. Conversely, oil heavyweights Santos and Woodside Energy are expected to experience a brief sell-off.
Prasad Patkar, head of investments at Platypus Asset Management, is focused on the prospect of falling bond yields. He believes this would boost gold, favouring Capricorn Metals, and contribute to a rebound in property group Charter Hall, building supplier James Hardie, and plumbing group Reliance Worldwide. However, Patkar notes the broader ASX is lagging international rivals that are driven by the artificial intelligence thematic and semiconductor companies, a sector largely absent from the Australian market. Meanwhile, Sean Sequeira, chief investment officer at Australian Eagle Asset Management, is bullish on the mining sector, anticipating that cheaper oil could stimulate US investment and consumer activity, thereby increasing demand for commodities such as copper and rare earths.
