Australian shares recover slightly as retreating oil soothes inflation fears

Australian shares gained on Tuesday as oil prices retreated after US President Donald Trump said the war against Iran could be over soon and reportedly considered easing some oil sanctions on Russia, easing inflation fears.

The S&P/ASX 200 index rose 1.6% to 8,739.20 by 2335 GMT.

The benchmark lost over $138 billion in value on Monday, as anxiety over inflation driven by strong oil prices dominated sentiment.

Oil prices fell after the settlement, as Reuters reported that the Trump administration was considering further easing sanctions on Russian oil to help put a lid on global energy prices.

Trump also said that he thinks the war against Iran is very complete“ and that Washington was “very far ahead” of his initial four- to five-week estimated time frame.

Miners rose 2.6% to break a five-day losing streak.

World’s top listed miner BHP gained 2.8% after falling over 5% in the previous session.

Gold stocks added 2.5%, after losing nearly 18% in the previous five sessions on a strong dollar. Gold producer Northern Star Resources rose 2.6%, while Evolution Mining jumped 3.1%. Financials rose 2%, helped by all of the “Big Four” lenders, whose shares added between 1.5% and 1.6%.

Investment bank Macquarie Group surged 2.4%. Retreating oil prices helped battered airline stocks.

Virgin Australia surged 2.9%, although the carrier is down 19% this year. Following the retreat in crude prices, energy stocks bucked the trend, falling 2.9%.

The sub-index broke a three-day win streak supported by oil’s ascent.

Oil and gas producers Woodside Energy and Santos dropped 3% and 2.9%, respectively. Meanwhile in New Zealand, the benchmark S&P/NZX 50 index rose 1.1% to 13,246.87.