Market Wrap / waging war

The Australian sharemarket started the month of March in the red, retreating from record highs, as US-Israeli strikes on Iran hit risk appetite.

The S&P/ASX 200 settled fairly flat, finishing 0.03% lower to 9,200.90 points.

However, the energy sector soared, rising 5.3% as oil prices skyrocketed. Brent crude rose as much as 13% when Asia trade opened, before paring some of those gains. The conflict has disrupted key aviation hubs and oil shipments through the Strait of Hormuz.

Woodside shares rose 6.8% while Santos was up 6.7%.Gold also received a bid, as Iran retaliated with air strikes on neighbouring countries, sending investors to safe-haven bids. Northern Star was up 4.8%.

Defence stocks were also strong performers. Electro Optic Systems expects the current conflict in the Middle East to "accelerate opportunites", its shares rose 2.6%. DroneShield was up 6.6%.

The closure of airports in the region rattled the travel sector, with Qantas shares opening 10% lower before closing down 5.4%. Elsewhere, BHP closed at yet another high, up 1.4% to $59.25 as iron ore prices held firm. 

In corporate news; Ampol updated markets on its proposed acquisition of EG. The ACCC has divided by two the number of sites subject to competition concerns. And in M&A, Magellan Financial Group is set to merge with Barrenjoey, valuing the latter at just over $1.6 billion dollars.

US manufacturing PMIs are now due overnight, while reporting season plays the final minutes tomorrow, with Life360, Capstone Copper and NexGen Energy reporting.