ASX futures are pointing 0.2% lower to 9150, with the escalating Middle East crisis likely to weigh on sentiment at the open.
President Donald Trump took to Truth Social this morning to alert the world to a potential four more weeks of war with Iran.
The local market closed February on a strong footing, with the S&P/ASX 200 rising 23.3 points, or 0.3%, to a record 9198.6. The benchmark traded in a narrow range as investors digested the final batch of earnings results, capping a volatile reporting season.
The index gained 3.7% for the month, marking a third straight monthly advance and its strongest rise since May.
Consumer staples underperformed after Coles slumped 7.4% to $20.56 on weaker-than-expected first-half growth, particularly in liquor sales. Rival Woolworths eased 1% to $36 amid profit taking following its record one-day gain earlier in the week.
eToro market analyst Josh Gilbert said Coles delivered a solid result but failed to meet elevated expectations set by Woolworths.
“With Woolworths reporting strong early second-half momentum, the grocery wars narrative is alive and well. Both chains are fighting for the same cost-conscious shoppers, and while Coles’ results are solid, the market may have expected a brighter performance following Woolworths’ rebound,” he said.
Communication services led gains, with REA Group up 3.6% to $166.39. Materials stocks also advanced after MP Materials signed a major rare earths supply agreement with an unidentified carmaker. Lynas Rare Earths surged 10.1% to $18.98 and Iluka Resources climbed 9.1% to $6.75.
US: Credit jitters hit banks as inflation signals stay sticky
US equities finished lower on Friday ahead of strikes by Israel and the US on Iran, with financial stocks leading declines.
Wall Street lenders were unsettled by the collapse of UK mortgage provider Market Financial Solutions Ltd, triggering concerns about broader credit contagion in the private credit sector. The banking sector dropped 3.7%, with Apollo Global Management down 8.6%, Goldman Sachs off 7.5% and KKR falling 6.3%.
The information technology sector declined 2.2%, as artificial intelligence-related concerns continued to weigh. Nvidia shed 4.2%.
Fresh data added to pressure after the US producer price index rose 0.5% in January, above forecasts and the largest increase since September, pointing to persistent inflation.
At the close, the Dow Jones Industrial Average fell 1.1%, the S&P 500 lost 0.4% and the Nasdaq declined 0.9%. Outside financials and technology, the remaining S&P 500 sectors ended higher, led by healthcare and energy.
Europe: Record highs hold, but bank selling returns
European markets closed at a record high, marking an eighth consecutive month of gains, supported by stronger-than-expected corporate updates.
However, banks fell 1.7% in their sharpest one-day drop in 2 weeks. Barclays slid 4.2% following the UK lender’s collapse, while Santander lost 2.8% due to its exposure via Atlas SP Partners.
Defensive sectors attracted buyers, with healthcare up 1% and food and beverage stocks rising 1.5%.
The pan-European FTSEurofirst 300 edged 0.1% higher, while the UK FTSE 100 gained 0.6%.
Currencies: US dollar firms as risk mood deteriorates
The US dollar strengthened against major peers.
The euro fell 0.3% to US$1.1757, the Japanese yen weakened to JPY156.0 and the Australian dollar dropped 1.2% to US$0.7048.
Commodities: Energy pops on Iran risk; gold steadies, iron ore dips
Oil prices rose ahead of the weekend’s strike on Iran, with Brent crude settling up 3.2% to US$72.48 a barrel.
Base metals were firmer, with copper futures climbing 0.9% to a four-week high, marking a seventh consecutive monthly gain amid demand optimism.
Gold futures added 0.4% to US$5248 an ounce, near a one-month high, supported by geopolitical tensions and extending a seven-month winning streak.
Iron ore futures slipped 0.4% to US$99.69 a tonne.