Australia's share market has bounced sharply on optimism the US will wind down its military campaign against Iran, but doubts remain and aftershocks from the conflict are likely to linger.
The S&P/ASX200 soared by 190 points on Wednesday, up 2.24 per cent, to 8,671.8, as the broader All Ordinaries gained 201.7 points, or 2.32 per cent, to 8,885.6.
Reports the Trump administration plans to wrap up its campaign against Iran in the next two-to-three weeks have supported global equities, with investors keenly awaiting a special address from President Donald Trump slated for Thursday at midday Sydney time.
The top-200 is trading at its highest level for two weeks, while the All Ordinaries clawed back almost $60 billion of its former $3.2 trillion combined market value on Wednesday, with more than $320 billion wiped at the lowest point since the conflict began.
While the uptick was welcome, fund managers' portfolio rebalancing had played a crucial role kicking off the overnight lead from Wall Street, Capital.com senior market analyst Kyle Rodda said.
"This happens all the time in markets where a relatively benign story or information that is largely not new generates this really big move," Mr Rodda told AAP.
"Interest for the markets now is in this address to the nation from Trump, and it's anyone's guess what he will actually say, whether it's announcing a ground invasion, whether it's announcing mission accomplished or whatever else - we'll have to see."
Oil prices rebounded after dipping on Tuesday, with Brent crude trading at $US104.60 a barrel, up more than 43 per cent since the US and Israel began attacking Iran, but down from their recent peak near $US119.
Local energy stocks edged 0.5 per cent higher ahead of a rare national address from Prime Minister Anthony Albanese to reportedly encourage Australians to conserve fuel as supplies dwindle.
Hopes of an end to the conflict and the potential reopening of the Strait of Hormuz had investors dipping into mining stocks, which have been hammered since early March.
Basic materials surged almost five per cent with help from mega miners BHP, Rio Tinto and Fortescue, along with resurgent gold producers.
Gold itself edged slightly higher during the session to $US4,694 ($A6,971) an ounce, however an end to conflict could prove a double-edged sword for the precious metal, IG market analyst Tony Sycamore said.
"On one hand, a lasting peace agreement would remove the geopolitical safe haven bid that supported prices in the run-up to the conflict," Mr Sycamore said.
"On the other hand, it would allow for lower oil prices and easing inflation fears, which would revive expectations for Federal Reserve rate cuts later in 2026."
The dynamic, combined central bank demand, could leave the door open to further upside, but with a choppy path to get there, the analyst said.
The heavyweight financials sector charged 1.8 per cent higher, as Commonwealth Bank led its big four counterparts higher with a 2.5 per cent boost to $171.90.
A lift in investor confidence helped lift IT stocks (+3.5 per cent), consumer discretionaries (+1.8 per cent) and the health care sector (+1.5 per cent), while industrials gained 1.1 per cent as Qantas shares advanced to $8.67.
In company news, shares in casino group Star Entertainment rocketed 8.7 per cent higher to 12.5 cents after completing its exit from its stake in Brisbane's Queen's Wharf project.
The Australian dollar is buying 69.05 US cents, up from 68.69 US cents on Tuesday at 5pm, the Aussie lifting on a rosier outlook for global growth and expected commodity demand.
ON THE ASX:
* The S&P/ASX200 gained 190 points, or 2.24 per cent, to 8,671.8.
* The broader All Ordinaries lifted 201.7 points, or 2.32 per cent, to 8,885.6.
One Australian dollar trades for:
* 69.05 US cents, from 68.69 US cents at 5pm AEDT on Tuesday.
* 109.50 Japanese yen, from 109.38 Japanese yen.
* 59.69 euro cents, from 59.77 euro cents.
* 52.08 British pence, from 51.90 British pence.
* 120.22 NZ cents, from 119.92 NZ cents.
