Issue #10 | ASX Slips Again Amidst Rising Inflation

ASX - ASX This Week, Top 3 Winners & Losers
Deals Down Under - AirTrunk’s $1.7bn Financing in Japan
Global Markets - Hormuz Blockage Triggers Energy Shock
Other News - Aussie Politics, Sport, Culture and more

The ASX 200 has fallen for its third consecutive week, as escalating tensions in the Middle East continue to weight on markets. The Reserve Bank of Australia (RBA) intervened, raising interest rates by 25 basis points to 4.10%. Persistent inflation combined with higher energy costs, and tighter monetary policy dampened investor sentiment, with the index falling 2.2% for the week, and 8.4% since the beginning of the Middle Eastern War. 

The week’s best performers on the ASX 200 include:

In contrast, the worst performers on the ASX 200:

The top 3 performers of the week all delivered attractive announcements to the market. Telix Pharmaceuticals (ASX:TLX) was down 57% over the past 12 months, however they have produced impressive earnings results (56% year-on-year) and a recent submission on a new drug application for a medical imaging drug, designed to help doctors see brain cancer more clearly.

During the week, Sims Ltd (ASX:SGM) delivered an FY26 EBIT expectation that would double FY25, attracting investors and surging their share price over 10%.

Viva Energy (ASX:VEA), a leading local energy company that refines, imports and distributes fuel were financially backed by the Federal Government. The support is aimed at ensuring the ongoing operational viability of its refinery, helping to stabilise and support Australia’s tightening domestic fuel supply.

The worst performers on the ASX this week had one thing in common - gold. Gold miners were hit hard as rising interest rates, a stronger US dollar and a sharp 9% monthly drop in gold prices weighed on the sector. As oil prices surged on the back of escalating geopolitical tensions, investors rotated out of gold and into energy stocks, which increased 6.35% for the week. With inflation expected to persist, rates may remain elevated or rise further, increasing the attractiveness of bonds and cash, and continuing to put pressure on the gold sector.

Australian-founded data centre giant AirTrunk is doubling down on the global AI boom, securing a $US1.2bn green loan to fund its Tokyo data centre campus, the largest data centre financing in Japan to date. The deal, backed by a 12-bank syndicate including SMBC and MUFG, takes AirTrunk’s total investment in Japan beyond $US8bn as it scales infrastructure to meet surging demand.

Owned by Blackstone following its $24bn acquisition in 2024, AirTrunk is rapidly expanding across Asia and the Middle East, positioning itself as a key enabler of hyperscalers like Amazon, Microsoft and OpenAI. The Tokyo project alone is expected to deliver over 300MW of capacity, highlighting the sheer energy intensity behind AI and cloud computing. The company is also continuing its Middle East expansion, including a $US3bn Saudi Arabian data centre development, signalling confidence in long-term demand despite rising geopolitical tensions.

Higher rates in Australia are increasing the cost of debt and are likely to slow new debt raisings, particularly for more leveraged transactions. However, Japan’s still relatively low-cost financing environment continues to support large-scale debt raises, even as borrowing costs rise globally. While tighter financial conditions are beginning to weigh on deal activity, high-quality, long-duration assets with strong counterparties continue to attract global capital.

Global markets are under pressure as Iran’s effective blockade of the Strait of Hormuz, a narrow corridor handling around 20% of global oil and a large share of LNG, disrupts energy flows and drives a sharp repricing in risk assets. Brent crude is holding above US$100 per barrel as attacks on regional infrastructure and tanker routes constrain supply. The impact is already feeding through to inflation expectations, with bond yields pushing higher as markets reassess the timing (and likelihood) of rate cuts.

The escalation follows more than three weeks of conflict between Iran and US-Israel forces, with reported casualties exceeding 4,000. Iran has moved beyond conventional strikes, leveraging asymmetric tactics across the strait, including sea mines, missiles, fast boats and drone warfare. The disruption is not just physical. Shipping insurance premiums have surged, vessels are being rerouted, and delays are compounding supply chain pressures, embedding a broader risk premium into global energy markets.

Donald Trump is now intensifying pressure on allies to help reopen the strait, arguing that a coordinated naval response is a “simple” solution to stabilise oil markets. He has criticised Australia and other NATO partners for failing to act, despite benefiting from global energy stability, and has even called on China to contribute given its reliance on Middle Eastern oil imports. The push reflects growing US frustration as economic consequences spread globally.

Australia’s stance reflects a more cautious balance. Anthony Albanese initially backed the US-Israel campaign and confirmed Australian-linked assets in the region, including Al Minhad airbase, have been struck. However, beyond limited defensive deployments, Australia has ruled out escalation and is now pushing for de-escalation, arguing key military objectives have been achieved.

The International Energy Agency has warned this could become the worst oil disruption in decades, urging demand-side responses like reduced travel and remote work. The longer Hormuz remains constrained, the greater the risk of a global recession, and more importantly, the clearer it becomes that control of the strait gives Iran a persistent lever over global inflation and growth.

Thanks for reading Capital Down Under - your guide to the ASX, Aussie Deals, Global Markets and more.

Hit reply with any thoughts or topics you want covered next week!