The Australian sharemarket is expected to open sharply higher on Thursday, with futures pointing to a gain of 75 points, or 0.9%, as investors weigh stronger commodity prices against mounting inflation risks from the escalating conflict with Iran.
June employment figures will be the key domestic focus, while Santos, Karoon Energy and Sandfire Resources are among the companies scheduled to release quarterly updates.
Energy and miners lift local market
The S&P/ASX 200 gained 29.7 points, or 0.3%, to close at 8,823 on Wednesday, supported by energy producers and the major miners after oil, copper and gold prices strengthened.
Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) rose 1.3% and Santos Ltd (ASX:STO) added 1%, while refiners Ampol Ltd and Viva Energy Group Ltd advanced 2.1% and 1.6%, respectively.
Coal producers also benefited as higher oil prices increased the appeal of alternative fossil fuels, with Yancoal Australia Ltd (ASX:YAL) climbing 5% and Whitehaven Coal Ltd gaining 1.5%.
Beetaloo Energy Australia Ltd (ASX:BTL, OTC:EEGUF) surged 5.9%, having traded as much as 20% higher during the session, after securing 85 hectares of Northern Territory land for two proposed hyperscale artificial intelligence data centre campuses.
The company plans to develop up to 2 gigawatts of gas-fired generation capacity to power the sites.
BHP Group Ltd (LSE:BHP, ASX:BHP) and Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) each rose 2.5% after copper futures jumped overnight, reflecting the growing importance of the metal to both miners as iron ore demand matures.
Gold producers also strengthened, with Northern Star Resources Ltd (ASX:NST) up 3.5%, Evolution Mining Ltd (ASX:EVN) gaining 4.3% and Newmont Corp adding 3.5%. South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32) extended Tuesday’s rally with a further 4.6% gain.
Lynas Rare Earths Ltd (ASX:LYC, OTC:LYSCF) bucked the resources trend, falling 3.6% after reporting a more than 10% year-on-year decline in June-quarter neodymium-praseodymium production due to water recycling plant problems and concentrate quality issues at Mount Weld.
Rate-sensitive and technology stocks retreat
The inflationary threat posed by higher oil prices weighed on rate-sensitive sectors, with Goodman Group (ASX:GMG) down 2%, Scentre Group falling 1.5% and Stockland Corp Ltd losing 1.9%.
Origin Energy Ltd (ASX:ORG) dropped 1.9% after revealing it was investigating a suspected cybersecurity breach that may have exposed personal information belonging to some of its 4.7 million Australian customers.
Technology stocks also weakened. Xero Ltd fell 2.6%, TechnologyOne Ltd declined 2.3% and WiseTech Global Ltd slipped 0.5%.
Wesfarmers Ltd (ASX:WES) lost 2.1% after announcing plans to invest between A$645 million and A$715 million alongside Sociedad Quimica y Minera de Chile to expand the Mount Holland lithium mine and concentrator.
The major banks were mixed. Commonwealth Bank of Australia (ASX:CBA) gained 0.7%, Westpac Banking Corp and ANZ Group Holdings Ltd edged 0.1% higher, while National Australia Bank Ltd slipped 0.1%.
Wall Street slips ahead of major earnings
US sharemarkets finished mostly lower ahead of results from Alphabet and Tesla, with weakness among technology megacaps outweighing a rebound in semiconductor stocks.
The Dow Jones Industrial Average finished broadly flat, the S&P 500 eased 0.1% and the Nasdaq Composite fell 0.6%.
Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) gained 2.3%, although the broader software sector lost 2.4%, with ServiceNow Inc (NYSE:NOW, XETRA:4S0) tumbling 6.5%.
Super Micro Computer Inc (NASDAQ:SMCI) soared 20% after announcing more than US$60 billion in new fourth-quarter orders and releasing stronger-than-expected preliminary results.
The update lifted peers Dell Technologies Inc (NASDAQ:DELL) and Hewlett Packard Enterprise Co (NYSE:HPE, XETRA:2HP) by 9% and 1.2%, respectively.
AT&T Inc (NYSE:T, XETRA:SOBA) rose 3.5% after adding more wireless subscribers than expected during the second quarter, while Philip Morris International Inc (NYSE:PM, XETRA:4I1) gained 3.3% following a quarterly earnings beat.
US Treasury yields climbed as rising energy prices raised concerns that inflation could reaccelerate and force the Federal Reserve to consider further rate increases.
The US 10-year Treasury yield rose three basis points to a two-month high of 4.66%, while the two-year yield increased four basis points to 4.30%.
European shares reach two-week high
European markets advanced to their highest level in two weeks, led by energy, aerospace and defence stocks.
The FTSEurofirst 300 index gained 0.6%, while the UK’s FTSE 100 rose 1.2%.
Aerospace and defence stocks were the strongest-performing sector, gaining 2.6%, while technology shares declined 0.5% ahead of major US earnings releases.
Airbus SE surged 7% after launching a €5 billion share buyback and outlining medium-term targets that included almost doubling profits by 2029.
Nestlé SA gained 2.2% following reports that Platinum Equity was nearing an agreement to acquire around half of the company’s European water business.
Randstad NV jumped 14% in its strongest session since 2008 after the global recruitment company exceeded quarterly revenue expectations.
The European Central Bank is due to meet on interest rates, with markets expecting the benchmark rate to remain unchanged at 2.25%.
Currencies mixed
Major currencies were mixed against the US dollar.
- The euro gained 0.1% to US$1.411.
- The Japanese yen was steady at ¥163.15 per US dollar.
- The Australian dollar slipped 0.1% to US$0.6997.
Oil reaches six-week high
Global oil prices climbed to their highest level in six weeks as the United States and Iran exchanged further strikes, increasing concerns over Middle Eastern energy production and shipping routes.
Brent crude futures settled 3.4% higher at US$94.07 a barrel, extending a sharp rise from below US$72 in early July.
US President Donald Trump played down the likelihood of near-term negotiations with Iran and threatened broader strikes, while also warning of a response should Iran-backed Houthi forces disrupt Red Sea shipping.
- Gold futures gained 1.9% to US$4,152 an ounce, their highest level in two weeks, supported by a softer US dollar, safe-haven demand and technical buying.
- Base metals weakened, with copper futures down 0.9% as Chinese buyers remained cautious and investors considered the inflationary implications of rising energy costs. Aluminium fell 0.6%.
- Iron ore futures eased 0.3% to US$98.38 a tonne.
Looking ahead
Australian investors will focus on June employment data and quarterly updates from Santos, Karoon Energy and Sandfire Resources.
In the United States, Intel, Blackstone and Newmont are due to report second-quarter results, alongside the release of weekly jobless claims.
The European Central Bank will also announce its latest interest rate decision.