ASX 200 Slips on Geopolitical Tensions as Energy Stocks Cushion Blow

June 23, 2025 03:24 PM AEST | By Team Kalkine Media

ASX 200 Slips on Geopolitical Tensions as Energy Stocks Cushion Blow — Image source: shutterstock

Middle East Strikes Trigger Risk-Off Mood Across Markets

Reports of military action involving the United States and Iranian targets over the weekend amplified fears of escalating conflict. The nature of the strikes and the resulting rhetoric around potential energy infrastructure blockades stirred anxiety among traders and global economic observers.

Speculation surrounding disruption in the Strait of Hormuz — a critical conduit for global oil shipments — added weight to oil price projections, creating volatility across energy, freight, and industrial-linked assets. Market observers pointed to the possibility of ripple effects across oil supply chains and maritime logistics networks.

Oil-Linked Equities Gain Ground Amid Broader Weakness

Despite the general downturn, the energy segment of the ASX 100 outperformed, buoyed by a rapid rise in crude prices. Key oil producers and fuel distributors posted early gains, driven by short-term bullish sentiment on supply constraints.

The supportive moves in the energy space provided temporary relief to the index, even as investor positioning reflected broader caution. Defensive buying and rotation into commodities also underscored the market’s reaction to ongoing geopolitical shifts.

Safe-Haven Demand Lifts Gold as Dollar Weakens

While equities across multiple sectors faced pressure, gold benefitted from safe-haven flows. The Australian dollar experienced weakness against major currencies, influenced by both risk aversion and interest rate expectations.

Gold-related companies saw interest rebound, aligning with global moves into more stable assets amid rising geopolitical instability. The session saw mixed returns for precious metals miners, with market action favouring names that benefit from strong bullion pricing and lower production exposure.

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