The Australian sharemarket is expected to open in negative territory on Tuesday, with futures pointing to a fall of 36 points, or 0.4%, as escalating conflict in the Middle East fuels inflation concerns and weighs on global equities.
Investors will also be watching quarterly updates from HUB24 Ltd (ASX:HUB) and Alkane Resources Ltd (ASX:ALK, OTC:ALKEF).
ASX edges lower as tech losses offset energy gains
The S&P/ASX 200 finished Monday down 5.4 points, or 0.06%, at 8,791.3, with five of the 11 sectors closing higher.
Energy stocks led the market with a 1.8% gain as oil prices climbed sharply, while the technology sector fell 1.55% amid continued weakness in global artificial intelligence-related stocks.
Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) rose 1.44%, Santos Ltd (ASX:STO) gained 2.08%, Ampol Ltd advanced 1.01% and Viva Energy Group Ltd jumped 3.85%.
Among the major miners, BHP Group Ltd (LSE:BHP, ASX:BHP) was unchanged at A$57.54, while Fortescue Ltd (ASX:FMG) fell 0.53% and Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) declined 1.86%.
Gold stocks also came under pressure as rising oil prices increased speculation that the US Federal Reserve may need to keep interest rates higher to contain inflation. Northern Star Resources Ltd (ASX:NST) lost 1.04% and Evolution Mining Ltd (ASX:EVN) fell 2.09%.
The major banks were mixed, with Commonwealth Bank of Australia (ASX:CBA) and National Australia Bank edging lower, while ANZ Group Holdings and Westpac Banking Corp posted modest gains.
Technology stocks remained under pressure, with WiseTech Global Ltd falling 3.55%, Xero Ltd losing 2.08% and TechnologyOne Ltd declining 1.48%.
Wall Street mostly lower amid oil volatility
US sharemarkets were mostly weaker on Monday as concerns about an escalation in Middle East hostilities outweighed efforts to secure a pause in the conflict.
Eight of the 11 S&P 500 sectors finished lower, led by healthcare and materials.
The Dow Jones Industrial Average fell 0.6%, the S&P 500 lost 0.2% and the Nasdaq finished broadly flat.
Semiconductor stocks outperformed, with the Philadelphia Semiconductor Index rising 0.6%. Marvell Technology gained 3.3%, Sandisk added 2.7% and Micron Technology advanced 1.9%.
Alphabet rose 1.5% following reports that Google is developing a Gemini-integrated server chip designed to improve artificial intelligence efficiency and ease computing-capacity constraints.
Domino’s Pizza gained 2.1% after quarterly revenue edged ahead of Wall Street expectations.
US Treasury yields rose as investors considered whether higher energy prices could flow through to consumer inflation. The 10-year Treasury yield increased five basis points to 4.59%, while the two-year yield rose four basis points to 4.21%.
European markets retreat ahead of ECB meeting
European sharemarkets declined as the worsening Middle East conflict heightened inflation concerns ahead of this week’s European Central Bank meeting.
The continent-wide FTSEurofirst 300 index fell 0.4%, while the UK’s FTSE 100 lost 0.7%.
Ryanair dropped 4.6% after reporting a 34% fall in first-quarter profit as higher fuel costs and lower fares weighed on earnings.
Thule fell 3.6% after second-quarter sales narrowly missed expectations and the company warned of price increases.
Swiss field-device manufacturer Belimo declined 2.37%, despite demand from data centres supporting higher first-half revenue.
UK markets were also pressured by concerns that Prime Minister Andy Burnham’s administration could add to the country’s already elevated debt burden.
Australian dollar firms as euro and yen weaken
Major currencies were mixed against the US dollar.
- The euro fell 0.2% to US$1.1414.
- The Japanese yen eased 0.1% to ¥162.51.
- The Australian dollar gained 0.2% to US69.98 cents.
Oil rises as traders monitor ceasefire efforts
Global oil prices moved higher as traders balanced threats of further US retaliation against Iran with reports that mediators had presented Tehran with a proposal for a 10-day ceasefire.
- Brent crude futures rose 1.3% to settle at US$89.22 a barrel.
- Copper futures gained 1.3% after data showed China’s imports of refined copper reached a nine-month high in June, supported by strong demand and declining domestic supply.
- Aluminium futures edged 0.1% higher after global primary aluminium production fell 1.5% year-on-year in June.
- Gold futures were little changed as investors assessed the impact of the US-Iran conflict on energy prices and the outlook for interest rates. Gold settled 0.1% lower at US$4,016 an ounce.
- Iron ore futures slipped 0.2% to US$98.70 a tonne amid seasonal weakness in Chinese steel demand.
Looking ahead
In Australia, HUB24 and Alkane Resources are scheduled to release quarterly updates.
In the US, investors will be watching earnings from IBM, Moody’s, CME Group, Texas Instruments, ServiceNow and GE Vernova.