ASX rebounds as Middle East tensions dissipate

Shares advanced on Monday, eking out their strongest gains all month, as healthcare and banking stocks offset a sell-off in energy stocks due to easing tensions in the Middle East.

At the closing bell, the benchmark S&P/ASX200 index added 1.1 per cent, or 81.9 points, to reach 7649.2, with all sectors bar energy finishing in the green.

The broader All Ordinaries added a similar amount.

Energy stocks were off 1.5 per cent at the close of trade with investors increasingly confident that the conflict in the Middle East was “contained”, however, ANZ economists cautioned that the “potential for escalation will keep nerves on edge.”

“Simmering geopolitical tensions are likely to mute risk appetite,” the bank’s analysts said in a note to clients.

With Brent trading below $US86 per barrel, oil and gas giant Woodside Energy fell 2.6 per cent to $28.63, while Santos slipped 1.2 per cent to $7.74.

Elsewhere on the benchmark, health care stocks were the best performers, up two per cent.

Sector heavyweight CSL added 2.2 per cent to $275.47, Cochlear rallied 2.3 per cent to $323.05 and Ramsay Health advanced two per cent to $51.08.

Financials rallied, up one per cent. NAB led the big four banks, adding one per cent to $33.40.

Materials stocks also advanced, up 1.1 per cent, pushed higher by ASX-heavyweight BHP which rallied 1.8 per cent to $45.42.

However, the increase masked a sell-off in gold stocks which slipped as the spot price dipped below $US2360 an ounce.

Bellevue Gold shed 6.9 per cent to $1.81, Regis Resources fell 3.5 per cent to $2.20 and Northern Star sank 1.4 per cent to $15.28.

In corporate news, online fashion retailer Cettire shed 6.2 per cent to $2.90 after one of its largest shareholders LHC Capital offloaded its stake in the firm.

Diversified mining and metals producer South32 was the top performer on the benchmark, rising 5.6 per cent to $3.37 even as it withdrew its annual forecast for Australian manganese output following the impact on its operations by Tropical Cyclone Megan.

Embattled gaming giant Star Entertainment continued its sell-off, sliding 1.2 per cent to 42c.

Earlier in the session, the company touched the record low of 41c per share as the company’s flagship Sydney operations continued to face an inquiry by the NSW Independent Casino Commission.

Uranium miner Boss Energy advanced 3.7 per cent to $4.76 after it reported it had produced its first drum of the commodity at its Honeymoon project in South Australia.

DroneShield slumped 16.1 per cent to 94c after the defence technology company announced it had completed the $100m equity raise priced at 80c per share.

Rare earths hopeful Base Resources rocketed 123.8 per cent to 24c after it agreed to a $375m takeover bid from US uranium and rare earths producer Energy Fuels.