NEWS + VIEWS – 24/04/2026
MARKETS
Global share markets over the past week have been driven mainly by escalating tensions involving Iran, which pushed oil prices sharply higher and reignited inflation concerns. Higher energy costs have made investors more cautious, as they increase the risk that central banks like the Federal Reserve and European Central Bank will delay cutting interest rates. While some support has come from continued strength in technology and AI-related stocks, markets have reacted to changing geopolitical headlines and mixed US corporate earnings results.
In Australia, the ASX 200 has been weaker than global peers due to a combination of global pressures and local factors. Rising fuel costs and interest rates are squeezing company margins, while a series of earnings downgrades has weighed on investor confidence. Although energy stocks have benefitted from higher oil prices, most other sectors have declined, leaving the broader market choppy.
COMPANY NEWS
Confession season, the informal name given to the period during which ASX-listed companies release trading updates ahead of their full-year results, has begun. For companies whose financial year ends on 30 June, this window falls around 10 to 14 weeks before year-end; late enough for management to have a reasonably clear picture of how the year will pan out, and early enough to satisfy the ASX’s continuous disclosure obligations that compel them to update the market if that picture has materially changed.
A growing number of companies are warning that surging energy prices brought on by the Middle East conflict will hit their bottom line, with a2 Milk (A2M), packaging company Orora (ORA) and waste management group Cleanaway Waste (CWY) all flagging weaker profits.
Logistics business Qube (QUB) joined the list on Monday, saying its full-year earnings would be reduced by between $10 and $20 million. QUB cited higher fuel and shipping costs and a fall in the agricultural goods it handles due to shipping lines’ inability to reach key markets in the Middle East. The increase in shipping costs has also hurt timber exports. However, the profit warning was not expected to affect the completion of Macquarie Asset Management’s $11.7 billion takeover.
On the same day, engineering group Worley (WOR) said that its full-year earnings would be between $30 and $40 million lower because of the conflict and were unlikely to grow compared with a year earlier. Project timelines have been delayed including starting and awarding new projects. While WOR does not operate in Iran, Iraq or Israel, other Middle Eastern countries contribute about 10% of its revenue. The share price fell almost -6% on the day of the announcement but has since recovered.
In its market update, Qantas (QAN) said that jet fuel prices have more than doubled since it issued its first-half result, with its forecast fuel cost rising by around $600 to $800 million. As a result of jet refining margins increasing from US$20 per barrel to around US$120, the estimated fuel cost for the second half of the year is now $3.1 to $3.3 billion. Given continued volatility in fuel prices and global economic conditions, domestic capacity in the fourth quarter of FY26 is being cut by 5%. Despite not operating in the Middle East, QAN warned that there would be international network changes and fare increases due to the conflict. The company will provide an update on the FY27 outlook at a later date.
Hearing implant manufacturer Cochlear (COH) cut its FY26 underlying net profit guidance to $290-$330 million after previously disclosing to the market in February that it expected to be at the lower end of $435-$460 million (a reduction of around -30%). COH said that it was forced to make the downgrade after demand for its implants had weakened more than expected, and sales volumes in the US had declined as customers were reconsidering ‘discretionary healthcare decisions’.
COH also said that surgical volumes have been constrained in Western Europe, resulting in growing waiting lists in the UK and Germany and given the conflict in the Middle East, it expects order cancellations and a heightened risk of delivery delays to some countries. The worse-than-expected profit downgrade shocked the market and the share price fell by more than -40%.
Meanwhile, banks are bracing for a rise in bad debts among their business customers as a result of the energy price surge, with Westpac (WBC) and NAB lifting their capital buffers. Last week WBC also said earnings in its treasury and markets division had been hit by interest rate volatility. Analysts warned that the update could trigger single-digit downgrades to earnings forecasts for the bank’s interim results, which will be announced on May 5.
NAB this week said that its interim results on May 4 would include $706 million in impairments, up from $485 million in the previous half, with an additional $300 million set aside as protection against a potential rise in bad debts. NAB’s share price has fallen the most of the major banks since the Middle East conflict began as it is the biggest lender to customers in the agricultural and transport sectors, who face higher costs for fertiliser and diesel.
In other company news, Rio Tinto (RIO) reported a solid set of first-quarter production results, with copper production rising 9% to 229,000 tonnes year-on-year, which was higher than the market expected. RIO highlighted the benefit from a major AI capex boom in the US that is driving demand for future facing commodities. Pilbara iron ore production was up 13%, marking its second highest first quarter since 2018.
RIO said that in relation to the Middle East conflict, the direct impacts on its operations have been limited, while commodity prices have responded favourably. Despite higher diesel prices steepening the cost curve, its cost position is resilient. The company maintained its full-year production and cost guidance.
BHP beat market estimates for third-quarter iron ore output and the miner said that it had concluded talks with China Mineral Resources Group, the state iron ore buyer, ending a months-long dispute stemming from bans on the procurement of the key steel-making ingredient from BHP.
BHP’s copper production slipped -7% from last year to 476,800 tonnes, due to weak performance at the Escondida and Pampa Norte operations in Chile. However, the company expects annual copper production to be in the upper half of its forecast range of 1.9 to 2 million tonnes.
Important Disclaimer
The directors, employees and authorized representatives of PPN Wealth do not guarantee the information in this report to be complete, up to date, accurate nor applicable to your personal circumstances. This is general investment advice only. You should not act on recommendations in this report without discussing proposed actions with your PPN Wealth adviser to ensure recommendations are suitable to your circumstances.
The principals, associates and employees of PPN Wealth may have investments in the securities or companies, referred to in this report.
This report may not be distributed in any way without the prior permission PPN Wealth. The directors, employees and authorized representatives of PPN Wealth do not accept any liability for third parties’ actions relating to this report.
