The Australian sharemarket is expected to open higher on Wednesday, with futures at 6.20am AEST pointing to a gain of 16 points, or 0.2%.
The positive lead follows gains across US and European markets, where technology and semiconductor stocks rallied strongly despite continued hostilities in the Middle East and uncertainty surrounding global trade.
Australian investors will also be watching quarterly updates from Beach Energy Ltd (ASX:BPT, OTC:BEPTF), Lynas Rare Earths Ltd (ASX:LYC, OTC:LYSCF) and Westgold Resources Ltd (ASX:WGX, OTC:WGXRF).
Australian market finishes flat after early losses
The S&P/ASX 200 recovered from an early decline of as much as 0.7% on Tuesday to close 2 points, or 0.02%, higher at 8,793.30.
Investors moved back into technology stocks, while rising gold prices supported precious metals producers. However, six of the market’s 11 sectors still ended lower after the index slipped 0.1% on Monday.
Technology shares led the recovery after Wall Street’s tech sector stabilised following last week’s sell-off.
NextDC Ltd surged 7.7% after the data centre operator said new customer contracts increased contracted utilisation by 11% during the June quarter.
Technology One Ltd gained 2.5%, Life360 Inc rose 2.8%, Xero Ltd added 2.1% and WiseTech Global Ltd advanced 0.9%.
Gold miners and South32 outperform
Gold producers rallied as spot gold climbed 1.2% to around US$4,057 an ounce amid continued uncertainty surrounding the US-Iran conflict.
Evolution Mining Ltd (ASX:EVN) jumped 5.6%, while Northern Star Resources Ltd (ASX:NST) gained 3.3%.
South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32) rose 6.6% after reporting that annual production exceeded guidance and quarterly sales volumes increased 15%, supported by strong market conditions across several commodities.
The diversified miner received an average US$70.60 an ounce for its silver during the financial year, more than double the US$31.70 achieved a year earlier.
Among the major diversified miners, BHP Group Ltd (LSE:BHP, ASX:BHP) gained 1.3%, Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) was unchanged and Fortescue Ltd (ASX:FMG) fell 1.3% as iron ore prices weakened for a second session.
Energy advances while banks weigh on index
Energy shares were generally stronger despite an earlier decline in oil prices.
Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) gained 1.1%, Viva Energy Group Ltd rose 1.2% and Ampol Ltd added 0.5%, while Santos Ltd (ASX:STO) declined 0.9%.
Yancoal Australia Ltd (ASX:YAL) climbed 2.3% on expectations that volatility in oil markets could increase demand for coal.
Financial stocks limited the broader market’s advance. Commonwealth Bank of Australia (ASX:CBA) fell 0.4%, National Australia Bank Ltd dropped 1%, and Westpac Banking Corp and ANZ Group Holdings Ltd each lost 1.2%.
Wesfarmers Ltd (ASX:WES) declined 1.2%, Eagers Automotive Ltd fell 3.8%, while CSL Ltd and Sigma Healthcare Ltd both shed 1%.
US markets rally as chip stocks surge
US sharemarkets advanced on Tuesday as a sharp rally in semiconductor stocks shifted investor attention away from Middle East hostilities and tariff uncertainty.
The Philadelphia Semiconductor Index surged 5.2%, led by a 12% jump in Micron Technology Inc (NASDAQ:MU). Intel Corp (NASDAQ:INTC, XETRA:INL) gained 8.6% and Marvell Technology Inc (NASDAQ:MRVL) rose 6.7%.
The broader information technology sector climbed more than 2.4%, making it the strongest-performing sector in the S&P 500.
3M Co (NYSE:MMM) gained 7.3% after lifting its full-year profit forecast, while Hasbro Inc (NASDAQ:HAS) rallied 8.8% after upgrading its annual revenue and earnings outlook.
Danaher Corp dropped 11% after lowering its core revenue growth forecast, while MSCI Inc fell 10% after increasing its full-year operating expense expectations.
The Dow Jones Industrial Average closed 0.7% higher, the S&P 500 gained 0.9% and the Nasdaq Composite advanced 1.3%.
Investors are now looking ahead to quarterly earnings from Alphabet Inc (NASDAQ:GOOG) and Tesla Inc (NASDAQ:TSLA).
European markets supported by technology and mining
European sharemarkets also moved higher, led by gains in technology and mining companies.
Technology stocks rose 2.1%, with ASMI gaining 5.4% and ASML Holding NV (NASDAQ:ASML, XETRA:ASME) advancing 4.7%.
Mining stocks climbed 1.7% as copper and gold prices strengthened.
Novartis AG gained 2% after reporting second-quarter core operating profit above market expectations.
Elsewhere, Julius Baer Group Ltd fell 4% despite stronger-than-expected first-half net inflows, while Schindler Holding AG dropped 5.4% after quarterly sales missed forecasts.
The continent-wide FTSEurofirst 300 Index rose 0.6%, while the UK’s FTSE 100 also gained 0.6%.
The two-year yield gained 5 basis points to 4.26%.
Currencies mixed against US dollar
Currency markets were mixed overnight.
- The euro declined 0.1% to US$1.1400.
- The Japanese yen weakened 0.4% to 163.22 per US dollar.
- The Australian dollar was broadly steady at US69.97 cents, after trading around US70.18 cents during Tuesday’s local session.
Oil reaches five-week high
Global oil prices climbed to their highest level in five weeks as investors assessed the risk of further supply disruptions in the Middle East.
Concerns increased following continued exchanges between the US and Iran and threats by Yemen’s Houthis to impose a naval blockade affecting Saudi Arabia.
Brent crude futures settled 2% higher at US$91.01 a barrel.
Copper and gold rise, iron ore slips
Base metals strengthened, with copper futures rising 3.4% to their highest level in more than six weeks.
Prices were supported by firm demand in China and a sharp decline in available inventories.
- Aluminium futures gained 1.3%.
- Gold futures rose 1.5% to settle at US$4,076 an ounce as traders assessed the prospects of a diplomatic breakthrough between the US and Iran.
- Iron ore futures slipped 0.1% as higher arrivals at Chinese ports added to concerns about growing inventories following the clearing of Typhoon Bavi-related congestion.