The Australian sharemarket is set for a subdued start, with futures pointing to a marginal 3-point decline as investors continue to assess geopolitical risks and rising oil prices.
The S&P/ASX 200 ended last week on a soft note, slipping 6.9 points, or 0.08%, to 8786.50, marking a fourth consecutive daily loss and its weakest weekly performance since March. Over the week, the benchmark fell 1.79%, weighed down by declines in healthcare, financials and materials, while energy stocks provided the only consistent support amid surging crude prices.
US markets hit record highs despite geopolitical uncertainty
US equities pushed higher on Friday, with the S&P 500 and Nasdaq closing at record levels as optimism around potential US-Iran negotiations lifted sentiment.
The Dow Jones Industrial Average edged 0.16% lower, while the S&P 500 gained 0.80% and the Nasdaq climbed 1.63%. For the week, the S&P 500 rose 0.55% and the Nasdaq added 1.5%, while the Dow slipped 0.44%.
Technology stocks led gains, with Intel surging more than 23% and Nvidia continuing its rally toward a US$5 trillion valuation. However, weakness persisted in defensive sectors, with healthcare, financials and real estate all posting weekly losses.
European shares decline on energy supply concerns
European markets ended the week lower as investors weighed the impact of the Middle East conflict on global energy supply and broader market stability.
The pan-European FTSEurofirst 300 index fell 0.51%, while the UK’s FTSE 100 dropped 0.8%. Airline stocks came under pressure from higher oil prices, while major banks including Barclays and HSBC also declined.
Pharmaceutical stocks weakened, although gains in the technology sector provided some offset, with Computacenter jumping on upgraded profit expectations.
Currencies mixed as bond yields ease
Currency markets were mixed against the US dollar as bond yields declined on hopes of easing geopolitical tensions.
- The euro rose 0.35% to US$1.1721.
- The Japanese yen weakened 0.20% to 159.37 per dollar.
- The Australian dollar edged 0.35% higher to US$0.7153.
US Treasury yields moved lower, with the 10-year yield falling to 4.31% and the 2-year yield dropping to 3.78%, reflecting expectations that tensions may ease.
Oil surges as commodities react to supply risks
Oil prices remained elevated, with Brent crude settling at US$105.33 per barrel after a volatile session, as traders balanced supply disruptions against the prospect of renewed peace talks.
Copper and aluminium prices edged lower amid ongoing uncertainty around shipping routes, while gold rose 0.4% to US$4740.90 an ounce, supported by inflation concerns and geopolitical risk.
Investors will now turn their attention to key economic data and earnings releases this week, including Australia’s March quarter CPI and a raft of major US tech earnings, alongside the US Federal Reserve’s latest interest rate decision.