Australian shares hit 3-week high, gold stocks rally on Iran conflict resolution hopes

By Jasmeen Ara Islam Shaikh

April 1 (Reuters) - Australian shares closed at a three-week high on Wednesday with broad-based gains led by gold miners, as optimism over a possible de-escalation in the Iran conflict buoyed bullion prices.

The benchmark S&P/ASX 200 index .AXJO ended 2.2% stronger at 8,671.80 points, its highest closing level since March 11. The ASX 200 had lost about 7.8% in March, marking its steepest monthly drop since June 2022.

Global markets regained their footing after steep losses in March, after reports said U.S. President Donald Trump was willing to end the military campaign against Iran even with the Strait of Hormuz largely closed. MKTS/GLOB

This prompted gold prices to rally, giving Australian gold miners a push. The yellow metal hit its highest level since March 20 earlier in the session. GOL/

"Gold stocks are rallying on the potential of further upside in the underlying precious metal's price," said Tim Waterer, chief market analyst at KCM Trade.

"If a meaningful de-escalation or an end to the conflict occurs, that could take the steam out of oil prices and the USD, which would suit gold."

The local gold sub-index .AXGD jumped 7.3% to its highest level in nearly three weeks after shedding 23.9% in March.

Top players Northern Star Resources NST.AX and Evolution Mining EVN.AX added 8.6% and 8.2%, respectively.

The broader mining sub-index .AXMM rose as much as 5.2%, gaining the most in nearly a year.

Sector heavyweights Rio Tinto RIO.AX and BHP BHP.AX added 3.5% and 4.3%, respectively, with both miners hitting their highest levels since early March.

Domestic banks added 1.8% in gains, recording their best intraday session since February 12, with the big four banks rising between 1.1% and 2.5%.

Energy stocks .AXEJ lost as much as 2.5% before ending 0.5% higher, as oil prices reversed overnight losses to gain some ground in early morning trade. O/R

Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50 index .NZ50 fell 0.7% to 12,825.87 points.

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