ASX plunges at the open to a four-month low
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More news: Australian shares tumbled, reversing earlier session gains, to a four-month low in early trade, dragged down by a sell-off across the mining, tech and healthcare sectors.
The benchmark ASX 200 was down by 126.6 points, or 1.47%, to 8,514 at 10:42am AEDT. Ten of the 11 sectoral indices opened in the red.
Energy (+3.28%) led the strongest performing sector for a second consecutive session, supported by Viva Energy (+9.24%), Ampol (+3.71%), Woodside (+3.59%) and Yancoal (+3.32%), as renewed strikes on an Iranian oil field had lifted the Brent crude price to USD109 a barrel.
Elsewhere, miners (-3.71%) slumped at the open. It was the worst performing sector, weighed down by Regis Resources (-8.93%), Genesis Minerals (-8.10%), Ramelius Resources (-8.04%) and Capricorn Metals (-7.95%).
Aside from miners, IperionX (-8.39%) and Zip (-7.69%) were among the weakest stocks at the open.
Australian shares to open lower as Fed holds and Iran war rattles markets
The news: Australian shares are set to open lower after Wall Street closed down on Wednesday, as the US Federal Reserve left interest rates unchanged and signalled only one rate cut this year, as officials assessed economic risks stemming from the US and Israeli conflict with Iran.
The numbers: Updated at 7:54am AEDT:
- ASX futures: down 86 points to 8,511.
- Wall Street: Dow Jones down 1.63%, S&P 500 down 1.36% and the Nasdaq down 1.46%.
- Europe: CAC 40 down 0.06%, DAX down 0.96% and FTSE 100 down 0.94%.
- Spot gold: down 3.75% to USD4,819 per ounce.
- Oil prices: Brent up 7.23% to USD110.01/bbl and US WTI up 3.89% to USD99.91/bbl.
- AUD: down 1.17% at 70.21 US cents.
- Bitcoin: down 3.60% to USD71,240.
The context: All three major US indices ended the session lower, with losses recorded even before the Federal Reserve’s policy decision. The central bank left rates unchanged at 3.5%-3.75% on Wednesday for a second consecutive meeting, broadly in line with economists’ expectations.
In economic forecasts released with the Federal Reserve decision, officials said the recent surge in oil prices is likely to have a temporary impact on inflation, while policymakers are still expecting to cut rates this year and forecasting inflation to ease to 2.2% by the end of 2027.
Brent crude extended gains to USD110 a barrel after an Iranian news agency reported attacks on an oil industry in Iran, heightening supply concerns.
In equities, US stocks have been supported by a recent rebound in technology shares. Advanced Micro Devices rose 1.60% after expanding its partnership with Samsung, while SanDisk advanced 4.65%.
On the data front, the Bureau of Labor Statistics showed US producer prices rose 3.4% year-on-year, topping economists’ forecast of 2.9%, ahead of any impact from the war in Iran on energy prices and consumer sentiment.
Locally, the Reserve Bank of Australia is scheduled to publish its biannual Financial Stability Review at 11:30am AEDT.
The source: Reuters
