ASX 200 drops 1.03% as oil rises to $US102 and yields hit 4.85%
The Australian market closed lower after crude prices surged past the dollar mark amidst geopolitical tension, while US bond yields reached their highest level in two years following disappointing Treasury buyback plans.
The S&P/ASX 200 benchmark fell 1.03%, closing at 8819.40 points. This marked a fresh six-week low for the index after slipping as much as 1.9% earlier in the day. All 11 sectors finished in the negative, with miners, banks, and technology stocks leading the decline. Brent crude climbed to approximately US$102 per barrel following announcements from Iran about potential war escalation and statements from US President Donald Trump regarding sustained high energy prices. The market then reacted to these geopolitical developments as oil settled just above US$100 during trading hours. In parallel, the US 10-year Treasury yield rose to 4.85%, a new peak since 2023, after the government's plan to purchase up to US$6 billion in long-term debt failed to meet expectations. Australian 10-year bond yields subsequently increased to 5.25%. Kenny Polcari of SlateStone Wealth noted that the risk premium for energy supply disruptions in the Gulf remained active. Sector performance was broad-based negative, though St Barbara Resources advanced after agreeing to sell its remaining interests in New Simberi and Tabar for US$453 million.
