The ASX is poised to open lower on Monday, with futures pointing to a decline of around 0.7–0.8% following another weak lead from Wall Street. The S&P/ASX 200 finished Friday down 9.4 points, or 0.11%, after a cautious end to the week.
Despite the softer finish, the benchmark index rose 87 points last week to 8,516, snapping a three-week losing streak. However, the market remains under pressure, down 7.42% for March and 2.27% for the first quarter amid escalating Middle East tensions, higher oil prices and recent RBA rate hikes.
Energy-driven volatility continues to dominate sentiment, with Brent crude holding above US$110 per barrel after surging as high as US$119.50 this month following disruptions to key shipping routes, including the Strait of Hormuz.
Sector performance last week was led by Materials (+4.57%) and Utilities (+3.36%), while Information Technology (-4.77%) lagged. At the stock level, Pilbara Minerals and Liontown Resources both surged more than 21%, while Amplitude Energy slumped 41.76%.
Investors will be watching the release of the RBA’s latest meeting minutes this week for guidance on the interest rate outlook. The central bank lifted the cash rate by 25 basis points to 4.10% earlier this month, with markets currently pricing in further tightening.
US markets extend losing streak amid geopolitical escalation
US equities closed lower on Friday, marking a fifth consecutive weekly decline as geopolitical risks intensified.
The Dow Jones fell 1.7%, joining the Nasdaq in correction territory, while the S&P 500 also dropped 1.7%. The Nasdaq declined 2%. For March, the S&P 500 is down 7.41%, with the Nasdaq 100 off 7.32% and the Dow down 7.78%.
Investor sentiment has been weighed down by escalating conflict in the Middle East, including threats to additional critical shipping routes such as the Bab el-Mandeb Strait. Concerns around prolonged supply disruptions and higher inflation continue to pressure risk assets.
Attention now turns to US labour market data this week, particularly the March non-farm payrolls report, after February’s unexpected contraction in employment.
Europe reverses gains as rate expectations shift
European markets ended lower, snapping a three-day rally as hopes of de-escalation in the Middle East faded.
The pan-European FTSEurofirst 300 index and the UK FTSE 100 both fell 1.3%, with industrials and financials among the worst performers.
In corporate news, Swedish miner Boliden dropped 20% after warning on earnings, while H&M slipped 2.2% following weaker-than-expected sales. UK retailer Next rose 4.2% after lifting profit guidance.
Currencies weaken against stronger US dollar
Major currencies lost ground against the US dollar amid heightened risk aversion.
- The euro fell 0.3% to US$1.1513.
- The Japanese yen weakened 0.2% to 159.82 per dollar.
- The Australian dollar dropped 1% to US$0.6876.
Commodities volatile as oil surge dominates
Oil prices remained elevated as supply concerns persisted, with Brent crude rising 5.7% to US$108.01 per barrel.
Base metals were mixed.
- Copper was down 1.5% on macro concerns and higher inventories, while aluminium gained 1.5% on tightening supply.
- Gold fell 3.9% to US$4,376 an ounce as markets reassessed safe-haven demand.
- Iron ore edged 0.1% higher to US$106.14 per tonne.