Australian shares are expected to open sharply higher on Friday, tracking gains on Wall Street and upbeat US economic data, after the local market extended its losing streak in the previous session.
ASX 200 futures were up 127 points, or 1.5%, to 8795, pointing to a rise of more than 1% at the open. The positive lead follows a strong session in the US, where resilient economic growth and solid corporate earnings lifted sentiment. Atlassian surged 24% in extended trade after delivering quarterly results.
The S&P/ASX 200 fell 21.2 points, or 0.2%, to 8665.8 on Thursday, marking its eighth consecutive decline — the longest losing streak since 2018. Despite the pullback, the index still posted a 2.2% gain for April.
Investor sentiment remained under pressure as oil prices spiked above US$126 a barrel amid escalating tensions in the Middle East, particularly around the Strait of Hormuz and the ongoing Iran conflict.
IG market strategist Tony Sycamore said the prolonged uncertainty was weighing on equities.
“Markets have been pricing for nine weeks that this will be resolved in two weeks … and we’re still no closer,” he said.
Consumer staples led losses after Woolworths warned higher fuel costs would impact earnings. The retailer now expects Australian food EBIT to rise in the mid to high single-digit range, sending its shares down 7.8% to $34.39. Coles also declined 3.6% to $22.11.
Mining stocks were weaker as gold prices softened, with Newmont down 2.1% and Evolution Mining off 5.3%. Mineral Resources bucked the trend, rising 3% to $63.71 after upgrading full-year production guidance.
Technology stocks outperformed, supported by strong US earnings. WiseTech Global gained 3.4% and NextDC added 1.7%.
The major banks were firmer, with ANZ up 1.3% and Commonwealth Bank rising 0.9%.
US markets rally on earnings and economic resilience
US equities advanced, with the Dow Jones rising 1.6%, the S&P 500 up 1% and the Nasdaq gaining 0.9%. The S&P 500 and Nasdaq recorded their strongest monthly gains since 2020, climbing 10.5% and 15.6% respectively in April.
Communication services led sector gains, rising 4%, while 10 of 11 sectors finished higher.
Corporate earnings remained a key driver. Alphabet jumped 10% on strong cloud performance, while Eli Lilly surged 10.2% after lifting its profit outlook. Caterpillar rose 9.9% to a record high on robust demand.
However, some megacap tech stocks were weaker, with Meta down 8.5% and Microsoft falling 3.9% on concerns over AI-related spending.
US economic data showed GDP growth of 2.0% in the March quarter, while jobless claims fell to their lowest level since 1969. Elevated energy prices kept inflation above 3%, dampening expectations for near-term rate cuts.
European equities climb on earnings optimism
European markets posted strong gains, marking their best monthly performance in over a year. The FTSEurofirst 300 rose 1.4% and the UK FTSE 100 gained 1.6%.
The European Central Bank held rates steady but signalled ongoing inflation concerns, reinforcing expectations of further rate hikes this year.
Rolls-Royce rose 7.6% after reaffirming its profit outlook, while banking stocks were mixed following softer trading updates from French lenders.
Currencies strengthen against US dollar
Major currencies moved higher against the US dollar.
- The euro rose 0.5% to US$1.1739.
- The Japanese yen strengthened 2.5% to ¥156.41 following reported intervention by Japanese authorities.
- The Australian dollar gained 1.2% to US$0.7199.
Commodities volatile as oil retreats from highs
Oil prices pulled back after earlier surging above US$126 a barrel.
- Brent crude settled 3.4% lower at US$114.01, with speculation around contract expiries contributing to the decline.
- Gold futures rose 1.5% to US$4,630 an ounce on a softer US dollar, though the metal still recorded its second consecutive monthly loss.
- Iron ore was steady at US$107.18 a tonne, while base metals were mixed.
Looking ahead
In Australia, investors will focus on earnings from ANZ and ResMed, alongside the March quarter Producer Price Index.
In the US, earnings season continues with Exxon Mobil, Chevron and Moderna among those reporting. The ISM manufacturing PMI is also due, with a reading of 52.2 expected.