The ASX is set to open lower today.
The local bourse saw a strong day for the energy and materials sector on Friday, but this was offset by falls among the banks and healthcare businesses.
All this led to the S&P/ASX 200 finishing close to flat with a 0.02% gain to 7114.5 points.
Worries over shortages drove the energy sector as Europe heads into autumn.
Whitehaven Coal Ltd surged 6.2% to $7.36, with New Hope Corporation Limited up 4%.
Also, up over 4% were oil and LNG majors Santos and Woodside.
On the flipside, TPG Telecom Ltd (ASX:TPM) performed the worst after missing analysts’ expectations for sales and profit. It fell 12.4% to $5.80.
Chicken farmer Inghams Group Ltd lost 9.4%.
Over in the northern hemisphere, Wall St snapped its four-week winning streak on Friday.
US stocks finished the week sharply lower as minutes from the Federal Reserve's July meeting, along with comments from several Fed officials, indicated the central bank is still determined to move its cash rate higher to combat inflation.
The Dow Jones Industrial Average fell 292.30 points, or 0.9%, to finish at 33,706.74. The S&P 500 was down 1.3%, and the Nasdaq Composite finished 2% lower.
The Dow lost 0.2% over the week, the S&P 500 fell 1.2% and the Nasdaq dropped 2.6%.
It wasn’t a good week for gold, which dropped to its lowest price in over three weeks.
Here’s what we saw (source Commsec):
- The Euro fell from highs near US$1.0095 to lows near US$1.0030 and was near US$1.0034 at the US close.
- The Aussie dollar fell from near US69.20 cents to US68.60 cents and was near US68.72 cents at the US close.
- The Japanese yen eased from near 136.20 yen per US dollar to JPY137.20 and ended US trade near JPY136.93.
- Global oil prices rose modestly on Friday. A stronger US dollar constrained gains. “A stronger greenback makes dollar-denominated commodities more expensive for buyers in Europe and Asia,” wrote Craig James.
- The Brent crude oil price rose by US13 cents or 0.1% to US$96.72 a barrel. And the US Nymex crude oil price rose by US27 cents or 0.3% to US$90.77 a barrel.
- Over the week Brent crude fell by US$1.43 or 1.5% and Nymex crude lost US$1.32 or 1.4%.
- Base metal prices were mixed on Friday. Lead fell by 1.5% and aluminium fell by 0.4% but other metals rose by as much as 2.2% (nickel). Over the week metals fell 1.4-6.9% with lead down the most. But copper bucked the trend, up 0.2%.
- The gold futures price fell by US$8.30 an ounce or 0.5% to US$1,762.90 an ounce.
- Spot gold was trading near US$1,748 an ounce at the US close. Over the week gold fell by US$52.60 or 2.9%.
- Iron ore futures fell by US51 cents or 0.5% to US$104.21 a tonne. Over the week iron ore fell by US$5.65 or 5.1%.
What's next for the Australian stock market?
Dale Gillham gives his take on what’s ahead for the ASX.
“The All Ordinaries Index has continued to defy logic rising again last week, which means it has been rising for 43 trading days or eight weeks straight without price falling below the prior week’s low.
“We haven’t seen such a sustained rise since November 2012 when it rose 18% over 113 days or 17 weeks. That said, the current rise is moving at a faster rate than the rise in 2012, as it has risen nearly 12% in under half the time.
“Right now, the market is walking up a see-saw and it will hit a point where it starts to descend, but the problem with this is that unlike a see-saw where we know the tipping point, the All Ordinaries Index could start its decline anytime. What I do know is that the more the market rises, the higher the probability it will fall.
“Currently, there is a lot of negative news about the market and what is occurring or may occur with the US and Australia economies and how this will affect the stock market.
“However, investors should be very selective about what they listen to given that what is happening in the US and Australian does not really support this bearish narrative.
“On a positive note, the reporting season has so far delivered some great results for a number of companies, while others have reported average or slightly below par results but certainly nothing to be alarmed about.”
Russia gas supply crisis looms
As Russia prepares to stop gas deliveries to Europe, the European gas supply shortage is now looming large.
Russian energy giant Gazprom has stated that deliveries from the Nord Stream pipeline will cease from August 31 to September 2 for “maintenance”.
"It is necessary to carry out maintenance every 1,000 hours" of operation, Gazprom said in a statement.
"On August 31, 2022, the only Trent 60 gas compression unit will be stopped for three days for maintenance” involving technicians from Germany’s Siemens, Gazprom said.
As a result, "gas transportation through the Nord Stream pipeline will be suspended for three days".
Deliveries will be restored to a flow of 33 million cubic metres of gas per day once maintenance is completed.
The decision is expected to revive gas shortage fears in Europe, which has previously accused Moscow of energy blackmail.
Since the Ukraine war began, Moscow has repeatedly cut gas deliveries to Europe in response to European sanctions.