ASX opens higher as US-Iran ceasefire extension lifts sentiment
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More news: Australian shares opened higher following a positive overnight lead from Wall Street, sparked by reports that the US and Iran have reached a draft agreement to extend their ceasefire for 60 days. Mining and tech stocks also supported the index.
The benchmark ASX 200 was up by 60.4 points, or 0.70%, to 8,653 at 10:34am AEST. Six of the 11 sectoral indices opened in the green.
Mining (+2.2%) was the strongest performing sector at the open, supported by a lift in BHP (+1.6%), Rio (+1.4%), Northern Star (+4.8%) and Evolution Mining (+5.3%).
Judo Capital (+11.5%), 4D Medical (+11%), DroneShield (+9.7%) and Vulcan Energy (+8.5%) were among the best performers across the ASX 200.
Elsewhere, utilities (-0.98%) was the weakest performing sector, weighed down by Origin Energy (-1%), APA Group (-0.7%), AGL Energy (-1.3%) and Energy World (-5.5%).
IDP Education (-18.7%), Champion Iron (-5.1%), Eagers Automotive (-3%) and Karoon Energy (-1.7%) were also among the worst performing stocks.
On the data front, the RBA is scheduled to release private sector credit data at 11:30am AEST.
Australian shares to open higher as Wall St breaks records on ceasefire hopes
The news: The Australian sharemarket is set to open higher after Wall Street hit record highs overnight following reports the US and Iran had reached a draft agreement to extend their ceasefire for 60 days. Investors were also digesting key US inflation data.
The numbers: Updated at 7:50am AEST:
- ASX futures: up 52 points to 8,675 points
- Wall Street: Dow Jones up 0.05%, S&P 500 up 0.58%, Nasdaq up 0.91%
- Europe: FTSE 100 down 0.75%, CAC 40 down 0.23%, DAX down 0.34%
- Spot gold: up 0.76% to USD4,489.70 per ounce
- Oil prices: Brent down 4.54% to USD90.00/barrel, US WTI down 0.20% to USD88.50/bbl
- AUD: up 0.30% at 71.63 US cents
- Bitcoin: down 0.84% to USD73,732.
The context: The S&P 500 and the Nasdaq closed at record highs on Thursday, while the Dow edged higher in afternoon trade to finish another record close. Brent crude settled below USD94 ($131) a barrel. Treasury yields fell across the curve and the US dollar weakened against all major developed-world currencies.
Sentiment improved after Reuters and Bloomberg reported the US and Iran had reached an agreement on Thursday to extend their ceasefire and ease restrictions on shipping through the Strait of Hormuz, although the deal has yet to be approved by leaders in Washington and Tehran. Iranian state media also said the agreement had not been finalised.
If approved, the agreement would represent the most significant step towards peace since the conflict began on February 28. Earlier, US Central Command said its forces had shot down five Iranian attack drones, and struck a ground control station in Bandar Abbas, and was preparing to launch a sixth.
On the data front, the US personal consumption expenditures price index accelerated to 3.8% year-on-year in April, the highest level of inflation since May 2023, driven by higher energy costs due to the conflict with Iran. The data reinforced expectations the Federal Reserve will keep interest rates unchanged well into next year. Meanwhile, US economic growth was revised down to an annualised 1.6% from the previously estimated 2.0%.
Locally, the Reserve Bank of Australia will release private sector credit data at 11:30am AEST.
