ASX 200 Slips Amid Escalating Middle East Tensions; Energy Stocks Shine

By: Team Kalkine | Jun 13, 2025 | Read Time : 10 Mins

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/ASX 200 closed lower on Friday, slipping 17.70 points or 0.21% to finish at 8,547.40. The decline followed news of Israel's attack on Iran’s nuclear sites, heightening geopolitical tensions. The index has gained 0.37% over the past five sessions and sits just 1.06% below its 52-week high. Eight of the eleven sectors ended in the red alongside the broader index. Energy stood out as the best-performing sector buoyed by a sharp rise in oil prices following Israel’s military strikes on Iran. The energy sector advanced 4.70% for the day and 6.49% over the week.

Macro Update: The Australian dollar fell sharply against the US dollar on Friday morning, losing 1 per cent within just a few hours. The decline followed reports of Israeli air strikes on Iran, with the Israel Defense Forces (IDF) stating that the attacks targeted sites linked to Iran's nuclear program. This geopolitical tension triggered a surge in oil prices and a flight to safety, with investors snapping up US Treasury bonds, driving bond yields sharply lower, since bond prices and yields move in opposite directions. The market reaction marked an extraordinary reversal from late yesterday, when investors had been moving into the Australian dollar and away from the US dollar.

Top Market Movers: Leading the ASX gains on Friday were Karoon Energy Ltd (ASX: KAR), which surged 10.89% to AUD 1.985, Woodside Energy Group Ltd (ASX: WDS), up 7.41% to AUD 25.21, and Capricorn Metals Ltd (ASX: CMM), which added 7.02% to close at AUD 10.22. On the downside, Clarity Pharmaceuticals Ltd (ASX: CU6) led the losses, dropping 7.69% to AUD 2.16, followed by Polynovo Ltd (ASX: PNV), which declined 6.72% to AUD 1.18, and Credit Corp Group Ltd (ASX: CCP), down 5.89% to AUD 12.94.

Commodity Update: The U.S. dollar surged along with safe-haven currencies like the yen and Swiss franc after Israel reportedly launched strikes on Iran, according to U.S. officials. Explosions were also reported near Tehran. Gold jumped 1.68% to USD 3,460.15, silver rose 0.91%, while copper slipped 0.24%. Brent crude soared 7.63% to USD 74.65, reaching multi-month highs as fears of supply disruptions intensified amid escalating Middle East tensions.

Our Stance: The S&P/ASX 200 posted a modest decline on Friday as heightened geopolitical tensions rattled markets following Israeli airstrikes on Iran’s nuclear facilities. The news came when investors were waiting for developments on ongoing US-China trade talks. Eight of the eleven sectors closed in the red, with energy standing out as the top performer, boosted by a sharp rise in oil prices. Commodities saw mixed movements, brent crude surged on supply concerns, gold and silver advanced, while copper edged slightly lower. Meanwhile, the Australian dollar dropped 1% amid a flight to safety and growing risk aversion.

The S&P/ASX 200 Index closed 17.70 points lower in its latest session, forming a small bearish candlestick on the daily chart amid rising trading volume a sign of cautious sentiment among market participants. Despite the pullback, the index remains above its 21-period Simple Moving Average (SMA), which serves as a critical dynamic support. Key support is established near 8,435.95, a pivotal level for preserving recent gains and sustaining investor confidence in the index’s upward path. Notably, the index also holds above its 21-period SMA on the weekly chart, reinforcing a longer-term bullish bias. This alignment of support across multiple timeframes reflects underlying strength and suggests continued resilience despite short-term volatility.

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