Australian shares notch two-week closing peak on Middle East peace hopes

Published Mon, May 25, 2026 · 03:32 PM

[SYDNEY] Australian shares ended at a two-week high on Monday (May 25), led by commodity stocks as investors pinned hopes on a breakthrough in US-Iran peace talks.

The S&P/ASX 200 index rose 0.4 per cent to 8,692 at the close, its highest since May 11, extending gains for a third straight session.

Australian markets joined a global relief rally as the prospect of a deal to end the conflict in the Middle East piqued investor optimism, sending crude prices below the US$100-per-barrel mark and assuaging concerns of energy-fuelled inflationary pressures.

However, doubts over the deal materialising kept investor risk appetite in check after Washington played down hopes for an imminent breakthrough, with trading volumes on the local bourse remaining below the 30-day average.

“Australian investors appear cautiously optimistic rather than outright bullish… many investors are waiting for firmer geopolitical direction before materially increasing risk,” said Marc Jocum, senior product and investment strategist at Global X ETFs.

Traders will be on the lookout for monthly inflation data due on Wednesday, which will show the impact of the war on consumer prices ahead of the central bank’s board meeting in June.

The resources sub-index closed at its highest since May 14, in tandem with higher iron ore and copper pricing. BHP and Rio Tinto advanced 0.7 per cent and 1.6 per cent, respectively.

Among gold miners, Northern Star Resources and Evolution Mining gained 5.5 per cent and 4.3 per cent, respectively.

Financials marginally closed below 0.1 per cent, largely weighed down by a 0.7 per cent decline in top lender Commonwealth Bank of Australia. Dispersion across banks is likely to persist from here, with banks needing to rely on cost control and operational efficiencies to defend earnings, Jocum added.

Energy stocks added to broader losses, down 2.4 per cent at their lowest since May 15, with Woodside Energy and Santos losing 4.2 per cent and 3.6 per cent, respectively.

New Zealand’s benchmark S&P/NZX 50 index finished slightly down 0.2 per cent at 12,970.28. The island country’s central bank is expected to hold rates at its meeting on Wednesday, per a Reuters poll. REUTERS