ASX opens lower as ongoing global volatility looms
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More news: Australian shares opened lower in early trade, as ongoing Middle East conflict and oil disruption weighed on the prospect of a rate hike from the RBA at the upcoming meeting.
The benchmark ASX 200 was down by 108 points, or 1.24%, to 8,634 at 10:44am AEDT. Ten of the 11 sectoral indices opened in the red.
Tech (-3.63%) slumped and was the weakest performing sector at the open, led by losses in WiseTech (-4.61%), Xero (-4.26%), Life360 (-3.50%) and Catapult Sports (-4.03%).
IperionX (-8.96%), Temple and Webster (-5.27%), Perpetual (-4.79%) and Endeavour Group (-4.73%) followed suit and were among the worst performing stocks.
Energy (+1.21%) was the only sector that opened in positive territory, with surging oil prices supporting gains in Yancoal (+5.87%), Whitehaven Coal (+3.67%), Ampol (+3.40%) and Beach Energy (+2.24%).
Ora Banda Mining (+6%) was the only stock outside of the energy sector that rallied after expanding its high-grade gold prospect in Western Australia.
Australian shares to fall as Wall St shrugs off historic IEA reserve release, oil rises
The news: Australian shares are set to open lower after Wall Street closed down on Wednesday as markets largely looked past a subdued inflation report and focused instead on intensifying hostilities linked to the US-Israeli war with Iran.
The numbers: Updated at 7:52am AEDT:
- ASX futures: down 47 points to 8,681.
- Wall Street: Dow Jones down 0.61%, S&P 500 down 0.08% and the Nasdaq up 0.08%.
- Europe: CAC 40 down 0.19%, DAX down 1.37% and FTSE 100 down 0.56%.
- Spot gold: down 0.24% to USD5,176 per ounce.
- Oil prices: Brent up 5.92% to USD93.02/bbl and US WTI up 6.06% to USD88.53/bbl.
- AUD: up 0.46% at 71.52 US cents.
- Bitcoin: up 0.92% to USD70,589.
The context: The S&P 500 retreated overnight, with financial stocks leading the decline. Shares in Goldman Sachs fell 1.2% and Visa dropped 1.7%, weighing the Dow industrials down 289 points, or 0.6%.
Brent crude rose 5% to around USD93 a barrel after the International Energy Agency (IEA) agreed to release 400 million barrels of oil from their strategic reserves to help address disruptions in global energy markets and stabilise soaring oil prices.
However, concerns about supply disruption in the Middle East intensified after US officials said Iran had placed mines in the Strait of Hormuz, while the UK said three cargo ships were struck by projectiles near the key shipping route.
Elsewhere, data from the US Labor Department showed consumer prices rose 2.4% in February from a year earlier, unchanged from January and in line with economists’ expectations, according to WSJ.
Soaring energy prices linked to the Middle East conflict could add further pressure to inflation in the coming weeks. The 10-year Treasury yield climbed to 4.2%, reflecting a soft bond auction and concerns that persistent price pressures could complicate interest rate cuts by the US Federal Reserve.
Locally, the Melbourne Institute is scheduled to release consumer inflation expectations for March at 11:00am AEDT.
