The Australian share market has rallied as Middle East tensions ease, with Iran's retaliation against the US largely symbolic and news of a ceasefire between the Islamic Republic and Israel.
The benchmark S&P/ASX200 index on Tuesday finished up 80.6 points, or 0.95 per cent, to a 12-day high of 8,555.5, while the broader All Ordinaries gained 86.8 points, or 1.0 per cent, to 8,774.8.
Oil prices plunged after US President Donald Trump announced the truce between Israel and Iran, which the two countries later confirmed.
Hours earlier, Iran gave forewarning of its missile strike against a US military base in Qatar, limiting damage.
Capital.com analyst Kyle Rodda said while tensions would likely continue and a ceasefire might be delicate, markets would be inclined to look past the issue as long as hostilities remained localised, the US didn't press for regime change and Iran avoided blockading the Strait of Hormuz.
Brent crude on Tuesday dropped to an 11-day low of $US68, down from $US78 the day before.
Woodside fell 6.5 per cent to an 11-day low of $24.16, Santos dropped 1.5 per cent to $7.66 and Karoon Energy retreated 6.5 per cent to $1.95.
As a whole, the energy sector lost 3.9 per cent, its worst day since April 9.
But overall eight of the ASX's 11 sectors rose, with the heavyweight mining segment the biggest gainer, up 2.0 per cent.
BHP climbed 2.4 per cent to $36.48, Fortescue rose 4.8 per cent to $15.23 and Rio Tinto advanced 3.1 per cent to $104.94 as the global mining group announced plans to develop the $US1.6 billion ($2.5 billion) Hope Downs 2 iron ore project in WA's Pilbara region.
Rio Tinto and Gina Rinehart's Hancock Prospecting will be equal partners in the joint venture and will split the costs 50-50.
Elsewhere, Qantas - whose biggest expense is jet fuel - gained 2.4 per cent to $10.32 and Virgin Australia added 11.4 per cent to $3.23 as the airline returned to the ASX after a five-year absence.
Moomoo market strategist Michael McCarthy said Virgin might be the luckiest ASX debutant of the year, with its shares beginning trading just as risk appetites rose and oil prices dropped.
In the financial sector, all of the big four banks finished higher, with Westpac growing 2.6 per cent to $34.29, NAB climbing 2.2 per cent to $39.75, CBA adding 2.1 per cent to $188.13 and ANZ growing 1.4 per cent to $28.60.
In the consumer discretionary sector, Collins Foods soared 17.4 per cent to a two-month high of $8.52 after the KFC franchisee announced record full-year revenue of $1.5 billion, although its profit was down.
"While trading conditions were subdued, particularly in the first half, the strength of the KFC brand held firm," managing director and chief executive Xavier Simonet said.
The Australian dollar was at a five-day high of 65.06 US cents, from 64.22 US cents on Monday.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Tuesday up 80.6 points , or 0.95 per cent, at 8,555.5
* The broader All Ordinaries rose 86.8 points, or 1.0 per cent, to 8,774.8
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.06 US cents, from 64.22 US cents at 5pm Monday
* 94.44 Japanese yen, from 94.47 Japanese yen
* 56.08 euro cents, from 55.82 euro cents
* 47.92 British pence, from 47.77 pence
* 107.96 NZ cents, from 108.26 NZ cents
