Global Markets | Australian shares rebound but trim gains as Iran denies US talks

Australian shares closed higher on Tuesday, underpinned by miners, but trimmed early gains after Iran denied reports of any negotiations with Washington, while investors remained cautious ahead of a key domestic inflation reading this ‌week.

The benchmark ⁠S&P/ASX 200 ⁠index closed 0.2% higher at 8,379.40 points, but remained on track for its worst month since March ​2020 if the current losing momentum persists.

Early optimism, driven by comments from U.S. President Donald Trump ​suggesting talks with Iran to end the war, faded after Tehran denied any such discussions, dampening hopes of a near-term resolution.


Investor caution persisted amid concerns the conflict could intensify ​inflationary pressures in an already overheated economy, with markets widely ⁠bracing for ‌February's inflation reading due on Wednesday.

Sentiment was further hit by ​data showing Australian consumer ​confidence fell to its lowest level in more than ⁠half a century last week, as higher borrowing costs and a ​surge in petrol prices clouded the economic outlook.

"Traders can absorb ​one shock at a time - right now they are staring at two simultaneously, and either one alone is capable of rattling markets in no time," Hebe Chen, market analyst at Vantage Markets said, adding that if data on Wednesday shows inflation hardening, "the market's already fragile footing gets thinner."

Miners gained 3%, snapping a three-session losing streak, supported by "selective ‌dip-buying after a very deep selloff," according to Chen. The sector had shed about 9% over the previous three sessions and roughly 19% ​since the Middle East ​conflict erupted in ⁠late February.

Shares of global miners Rio Tinto and BHP advanced 2.2% and 3%, respectively.

Gold miners climbed 3.1%, while industrials added 0.4%.

Rate-sensitive financials fell 1.3%, with three of the "Big Four" banks ​losing between 1.8% and 4.5%, while ANZ Group rose 0.5%.

Energy stocks slipped 0.4%, marking their fourth decline since the war erupted.

Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50 index fell 1.5% to 12,701.75 points.

Earlier in the day, Reserve Bank of New Zealand Governor Anna Breman flagged need of higher interest rates if inflationary pressures persist.