The Australian sharemarket is expected to open higher, with futures pointing to a 54-point, or 0.6%, gain.
However, the futures were set before the United States launched further airstrikes against Iran on Sunday in response to the deaths of US troops, while Iran fired missiles towards Jordan in a move that risked drawing neighbouring Israel further into the conflict.
The latest escalation could temper early optimism as investors assess the impact of the widening war on oil prices, inflation and global economic growth.
South32, Yancoal and Aurelia Metals are among the companies scheduled to release quarterly updates today, while Australian employment figures are due later in the week.
Miners drag ASX lower
The S&P/ASX 200 ended Friday down 44 points, or 0.5%, at 8796.70, despite seven of the market’s 11 sectors finishing higher.
Mining heavyweights BHP and Rio Tinto fell 2.7% and 2.4%, respectively, extending the previous session’s losses as concerns about the Middle East conflict and global growth weighed on commodity stocks.
Gold miners also came under pressure after bullion briefly dropped below US$4,000 an ounce. Northern Star Resources lost 4.1%, Evolution Mining declined 4.3% and Newmont shed 3.6%.
Technology stocks followed Wall Street lower, with NextDC down 2.5%, Life360 falling 3.4% and Megaport slumping 8.5%. Xero bucked the trend, adding 0.9%.
Coles gained 2.9% after abandoning its pursuit of Greencross Pet Wellness Company, while Telstra rose 2.7% as management appeared before a Senate inquiry into last week’s outage.
Energy stocks benefited from stronger oil prices, with Woodside up 3.3%, Santos gaining 1.9%, Ampol rising 1.7% and Viva Energy adding 1.3%.
Wall Street extends AI-led sell-off
US sharemarkets finished lower on Friday as selling across artificial intelligence-linked stocks broadened into a wider risk-off move.
The Philadelphia Semiconductor Index fell 1.6% on Friday and 10% over the week. Among the Magnificent Seven stocks, Meta dropped 2.7% and Alphabet declined 3.2%, while Apple was the only member to finish higher.
Netflix tumbled 7% after issuing a weaker-than-expected earnings forecast, while Uber Technologies lost 2.1% after announcing a proposed acquisition of Germany’s Delivery Hero (XETRA:DHER, OTCQX:DLVHF) worth almost US$15 billion.
Intuitive Surgical slumped 14% after maintaining its procedure growth forecast and warning that insurance changes may be delaying patient care.
The Dow Jones Industrial Average fell 0.8%, the S&P 500 lost 1% and the Nasdaq declined 1.4%.
US Treasury yields were mixed. The 10-year yield eased 2 basis points to 4.55%, while the two-year yield rose 2 basis points to 4.18%.
Domino’s Pizza is due to report earnings in the US, while Alphabet and Tesla are scheduled to release results on Wednesday.
European markets mixed ahead of ECB meeting
European markets finished mixed as weakness in technology stocks offset gains in utilities and defence shares.
The continent-wide FTSEurofirst 300 declined 0.4%, while the UK’s FTSE 100 added 0.3%.
Utilities rose 1.6%, making them the strongest-performing sector on the European benchmark.
Burberry fell 6% after saying the Middle East conflict had affected tourist spending in Europe, while Swedish defence and aerospace group Saab jumped 10% after reporting stronger-than-expected second-quarter operating profit.
Investors are now looking ahead to this week’s European Central Bank meeting and a busy corporate earnings calendar.
Currencies
Major currencies were mixed against the US dollar.
- The euro eased to US$1.1427.
- The Japanese yen strengthened slightly to ¥162.47.
- The Australian dollar slipped to US69.65 cents.
Commodities
Oil prices climbed to their highest level in more than a month as intensifying attacks across the Gulf raised concerns about further disruption to global shipping routes.
Brent crude futures settled 4.6% higher at US$88.10 a barrel, extending gains driven by restricted traffic through the Strait of Hormuz and fears of further regional closures.
Base metals were mixed.
- Copper futures fell 1.2% as the conflict weighed on the global demand outlook.
- Aluminium rose 1.2% amid continuing supply concerns.
- Gold futures gained 0.7% to settle at US$4,019 an ounce as recent economic data reduced expectations of an imminent US interest rate increase.
- Iron ore futures were flat at US$98.88 a tonne