Australian equities closed higher on Monday, underpinned by financials and technology stocks, as the United States and Iran moved to halt attacks, offering temporary relief but leaving investors wary of a fragile truce.
The S&P/ASX 200 index ended 0.7% higher at 8,823.40 points. The benchmark closed 0.2% higher on Friday. Iran and the United States agreed to halt hostilities in the Gulf and resume talks over the Strait of Hormuz dispute, a U.S. official said, boosting hopes of salvaging a fragile interim peace deal after days of tit-for-tat strikes.
Investors, however, remain wary of making big strides yet given the fragility of the deal.
"Investor confidence in the deal remains low. Infrastructure damage from the strikes has not been resolved, and the nuclear program questions have not gone anywhere," said Kai Chen, director at MPC Markets.
"Until the deal firms up, energy sector volatility will remain on the table and sentiment on the ASX will stay cautious."
Domestically, the benchmark has traded in a narrow range since last week, with even key inflation and jobs data failing to provide a clear catalyst.
"Australian equities have limited fuel to run higher. Near term, the triggers to watch are domestic jobs data, any shift in RBA communication, the trajectory of the U.S. Fed, and whether commodity prices can stabilise," Chen added.
Among sectors, financials rose 0.8%, with "Big Four" banks adding up to 1%.
Technology stocks climbed as much as 4.9% to a one-week high, with sector giant WiseTech Global rising 7.2%. According to Chen, bargain hunters stepped in after the sub-index lost more than 5% last week, its worst since mid-March.
Healthcare stocks rose 2.1% to a two-month high.
The broader mining sub-index advanced 0.8%, with BHP rising 1.4%.
Energy stocks added 0.7%, tracking firmer oil prices globally following days of tit-for-tat strikes by the U.S. and Iran that underscored the fragility of their interim peace deal.
New Zealand's benchmark S&P/NZX 50 index rose 0.4% to 13,545.56 points.
