Australian shares are poised to rebound sharply after a volatile start to the week, with futures pointing to gains of more than 2% as global markets steadied overnight.
SPI futures were up 184 points, or 2.2%, to 8,751 near 7.15am AEDT, indicating the S&P/ASX 200 could recover a portion of Monday’s heavy losses.
The expected bounce follows a brutal sell-off that wiped about $90 billion from the Australian sharemarket after oil prices surged on escalating tensions in the Middle East.
On Monday the ASX 200 fell 2.9% (252 points) to 8,599, after dropping as much as 4.3% intraday to 8,457.2, marking its worst session since the market shock triggered by US tariff announcements last April.
The decline came as crude prices surged toward US$120 a barrel amid supply disruptions in the Strait of Hormuz, raising fears of renewed inflationary pressures and tighter global monetary policy.
However, sentiment improved overnight after US President Donald Trump suggested the conflict involving Iran could end sooner than expected.
Wall Street rebounds as tech stocks lead late recovery
US equities recovered from early losses to close higher after Trump indicated the war timeline may be shorter than previously feared.
The Dow Jones Industrial Average rose 0.5%, recovering more than 110 points from its session low.
The S&P 500 gained 0.8%, while the Nasdaq Composite advanced 1.4%, led by strong gains in the technology sector.
Chipmakers were among the strongest performers. Nvidia climbed 2.5%, Intel rose 4.6%, Micron gained 4.6% and Sandisk surged 11%.
Elsewhere, Live Nation jumped 6.2% after reaching an antitrust settlement, while Hims & Hers soared 41% following the resolution of a dispute with Novo Nordisk over weight-loss drugs.
Not all sectors participated in the rebound, with banks and homebuilders among the weakest performers.
Europe trims losses as oil shock revives inflation concerns
European markets fell to their lowest level in more than two months before trimming losses late in the session.
The FTSEurofirst 300 index closed 0.6% lower, while the UK’s FTSE 100 slipped 0.3%.
Energy stocks were the only sector to post gains, rising 1.4% as oil prices surged earlier in the session.
Rate-sensitive sectors came under pressure, with real estate stocks dropping 2.7% as higher energy costs fuelled concerns inflation could delay interest rate cuts.
Bank stocks also extended losses, falling 0.5%.
Currency markets turn cautious as Aussie dollar firms
Currency markets were mixed against the stronger US dollar.
- The euro edged up to US$1.1614.
- The Japanese yen weakened to ¥158.32 per US dollar.
- The Australian dollar strengthened 0.7% to US70.70 cents.
Commodities stay volatile as oil surges and iron ore extends gains
Oil prices spiked early before easing after comments from Trump suggested the Iran conflict may not last as long as initially feared.
- Brent crude settled 6.8% higher at US$98.96 a barrel.
- WTI crude rose 4.3% to US$94.77.
Base metals were mixed.
- Copper futures rose 0.8%, while aluminium slipped 1.1%.
- Gold futures fell 1.1% to US$5,104 an ounce, pressured by a stronger US dollar and rising interest rate expectations.
- Meanwhile, iron ore futures climbed about 4% to US$102.90 a tonne, extending gains for a sixth straight session amid rising energy and freight costs.
Investors eye ex-dividends and key US economic data
Several major Australian companies are scheduled to trade ex-dividend today, including Coles, CSL, News Corp and Qantas.
In the US, investors will be watching key economic data releases later in the week, including inflation figures on Wednesday and GDP data on Friday, as the earnings season begins to wind down.