The ASX 200 is poised to open lower on Tuesday, with futures down 20 points (-0.23%) as of 8:30 am AEST, after geopolitical tensions rattled Wall Street and crude prices surged in early trade.
Traders are bracing for volatility following reports the US launched strikes on three Iranian nuclear facilities over the weekend. Brent crude spiked as much as 4% at the open, though gains later eased, while the US dollar caught a strong bid amid demand for haven assets.
Wall Street: Geopolitics rattles sentiment, chip stocks drag
US markets closed mostly lower on Friday ahead of the weekend’s strikes, with the S&P 500 down 0.22%, Nasdaq slipping 0.51% and the Dow inching 0.08% higher. Futures suggest more losses ahead as investors digest the implications of US military action and Iran’s vow to retaliate.
Semiconductors were among the hardest hit after reports the US may revoke tech waivers for firms operating in China. Nvidia fell 1.1%, while Applied Materials dropped nearly 2%. Meanwhile, Alphabet lost 3.5% after Turkish and European regulators escalated antitrust proceedings.
Bond yields fell as safe haven demand returned. The US 10-year dropped two basis points to 4.38%, while Fed Governor Chris Waller floated the idea of a July rate cut, only for Richmond Fed’s Thomas Barkin to caution against moving too soon.
Commodities and currencies: Crude climbs, AUD slides
Brent crude briefly topped US$80 per barrel before settling near US$77, up roughly 3% for the week. Citi warned a closure of the Strait of Hormuz could push prices toward US$90, while ING flagged upside risk toward US$120 in the case of severe escalation.
Gold traded flat around US$3,368/oz, while copper dipped 0.75%. The Aussie dollar weakened sharply, down 0.79% to US64.27c amid broad USD strength. Bitcoin dropped below the US$100,000 mark, down 1.76%.
ASX outlook: Broad-based caution as oil spikes, tech stumbles
After a subdued finish last week, the ASX is eyeing a third consecutive slip as traders return from the weekend to fresh geopolitical tensions and sliding offshore sentiment. Friday’s modest 0.2% fall masked earlier volatility, and today’s session could prove pivotal as the market reacts to oil price swings and the latest wave of corporate news.
AMP is reportedly weighing a major structural shake-up, which could include divesting or demerging its banking arm. The Santos takeover saga continues, with the South Australian government reportedly pushing for guarantees that any new owner will retain the company’s Adelaide headquarters and commit to local investment.
SmartPay has agreed to a NZ$1.20-per-share takeover from Shift4 Payments, unchanged from its earlier May offer, while Spark New Zealand is selling its 10% stake in Hutchison Telecommunications for NZ$47 million.
Investors will also be watching to see how the ASX’s updated 10:00 am AEST synchronised opening plays out this morning.
In small-caps action today
The Small Ords lifted 0.19% as of Monday morning, and today’s small-caps news flow includes upbeat developments across energy, gold and critical minerals juniors.
D3 Energy Ltd (ASX:D3E, OTCQB:DNRGF) reported a 35% boost in gas flow rates from its RBD03 well in South Africa following a clean-out. FireFly Metals Ltd (ASX:FFM, TSX:FFM, OTC:MNXMF) completed a A$70 million equity raising, including a Canadian bought deal and flow-through placement.
Patronus Resources Ltd (ASX:PTN) unveiled a maiden exploration target of up to 500,000 ounces at its Merlin gold prospect in WA’s Mertondale corridor. Over in Peru, Solis Minerals Ltd (ASX:SLM, TSX-V:SLMN, OTCQB:SLMFF) hit visible copper and gold mineralisation at its first-ever drill hole at Chancho al Palo, with assays due by August.