ASX 200 futures are pointing to a stronger open, up 1.4% to 9071, following gains on Wall Street as investors weighed rising oil prices against escalating geopolitical tensions.
The local market fell on Monday, with the S&P/ASX 200 slipping 34.6 points, or 0.4%, to 8926. Eight of 11 sectors closed lower as sentiment weakened after the United States moved to block maritime traffic to and from Iranian ports following failed weekend peace talks.
Energy stocks were a standout, buoyed by surging crude prices and the prospect of further supply disruptions through the Strait of Hormuz. Woodside Energy rose 2.6% to $34.15, Santos added 1.7% to $8.03 and Karoon Energy climbed 5% to $2.09. Coal stocks also gained, with Whitehaven Coal up 2.6% to $8.33.
US markets rise despite geopolitical tensions
US equities pushed higher, supported by strength in technology stocks despite ongoing geopolitical uncertainty. The Dow Jones rose 0.6%, the S&P 500 gained 1% and the Nasdaq advanced 1.2%.
SanDisk surged 11.8% ahead of its anticipated inclusion in the Nasdaq-100, while Allogene Therapeutics jumped 12% on positive trial data for its blood cancer therapy. Lithium giant Albemarle rose 6% following a broker upgrade.
However, gains were capped by weakness in energy-sensitive and travel sectors. Major airlines including United, Delta and American Airlines fell between 0.8% and 1.2% as higher oil prices raised concerns over fuel costs. Goldman Sachs declined 1.9%, while Fastenal dropped 7% after earnings.
US bond yields eased as investors moved into safe havens, with the 10-year yield falling 2 basis points to 4.29% and the 2-year yield down to 3.78%.
European markets edge lower on Iran tensions
European equities closed modestly weaker as the breakdown in US-Iran talks weighed on sentiment. Both the FTSEurofirst 300 and the UK FTSE 100 slipped 0.2%.
Financials provided some support, rising 1.2%, while defence stocks rebounded, with Rheinmetall and BAE Systems each up more than 2%.
Wise gained 6.5% after reporting strong cross-border volumes ahead of its planned Nasdaq listing. In contrast, Deutsche Telekom fell 6% following a broker downgrade, dragging on the broader index alongside weakness in communication services and healthcare stocks.
Currencies mixed as US dollar steadies
Currency markets were mixed against the US dollar. The euro rose 0.3% to US$1.1759, while the Japanese yen weakened slightly to ¥159.43 per dollar.
The Australian dollar strengthened 0.4% to US$0.7096, reflecting improved risk sentiment following gains in US equities.
Commodities surge on supply concerns
Oil prices jumped sharply as the US blockade of Iranian ports heightened fears of supply disruptions.
- Brent crude settled 4.4% higher at US$99.36 per barrel, after earlier surging above US$101.
- European natural gas futures spiked as much as 17% in early trade.
- Base metals also advanced, with copper rising 1.8% and aluminium climbing 4.4% to a four-year high of US$3,582 per tonne amid renewed supply concerns.
- Gold edged 0.4% lower to US$4,767 per ounce despite geopolitical uncertainty, while iron ore gained 0.4% to US$107.05 per tonne.
Outlook: earnings and data in focus
Investors will be watching a busy macro and corporate calendar. In Australia, NAB business confidence and Westpac consumer sentiment data are due, alongside several ASX dividend payments.
In the US, the first-quarter earnings season gathers pace with results expected from JP Morgan, Johnson & Johnson, Wells Fargo, Citigroup, BlackRock and CarMax, alongside the release of March producer price index data.