Australian shares to open higher despite renewed US-Iran tensions
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The news: The Australian sharemarket is set to open higher despite a softer session on Wall Street amid renewed doubts over the sustainability of the artificial intelligence rally. Investors are also watching fresh US-Iran tensions after weekend escalations strained the ceasefire underpinning peace talks.
The numbers: Updated at 8:00am AEST:
- ASX futures: up 16 points to 8,774 points
- Wall Street: Dow Jones down 0.09% on Friday, S&P 500 down 0.05%, Nasdaq down 0.24%
- Europe: FTSE 100 down 0.21% on Friday, CAC 40 down 0.55%, DAX down 1.29%
- Spot gold:down 0.24% to USD4,077 per ounce
- Oil prices: Brent up 0.66% to USD72.47/barrel, US WTI up 1.05% to USD69.91/bbl
- AUD: up 0.01% at 68.89 US cents
- Bitcoin: down 5.58% to USD59,790
The context: All three major US indices ended little changed in choppy trading on Friday. The Nasdaq fell more than 4% for the week and the S&P 500 lost more than 1%, as chipmaker stocks came under pressure after a strong quarterly rally as investors continue to question elevated AI valuations and the scale of debt-funded spending by major tech companies.
The Philadelphia Semiconductor index fell 7.9% its biggest weekly decline in more than a year, according to WSJ. Despite the pullback, the index remains up more than 87% this year on optimism around artificial intelligence demand.
Elsewhere, the US and Iran exchanged strikes on each other’s military infrastructure over the weekend. Iran’s Islamic Revolutionary Guard Corps said it launched missiles and drones at the Ali Al Salem Air Base in Kuwait and the 5th Fleet naval base in Salman Port in Bahrain.
The latest escalation followed Iran’s attack on a container ship on Thursday, which prompted US strikes the following day. Washington launched further attacks on Saturday after Tehran targeted a vessel carrying Qatari oil. Both sides accused each other of violating the ceasefire.
A senior US official told The New York Times that technical talks were still planned for the coming days and have not been cancelled.
Locally, the Reserve Bank assistant governor for financial markets Christopher Kent is scheduled to deliver a speech on monetary policy tools at 9:30am AEST.
