ASX plunges at the open dragged by mining and energy stocks
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More news: Australian shares tumbled at the open, dragged down by losses across the mining and energy sectors as global markets brace for ongoing impact of the Middle East conflict.
The benchmark ASX 200 was down by 131.3 points, or 1.45%, to 8,946 at 10:26am AEDT. Ten of the 11 sectorial indices opened in the red.
Mining (-3.56%) was the worst performing sector, dragged lower by Genesis Minerals (-9.94%), Resolute Mining (-8.94%), Capricorn Metals (-8.85%) and Westgold Resources (-8.39%).
Energy (-1.12%) also tumbled, driven by losses in Paladin Energy (-7.94%), Deep Yellow (-7.04%), Boss Energy (-6.32%) and Lotus Resources (-4.89%) amid ongoing tensions in the Middle East impacting oil prices.
Tech (+0.71%) was the only sector that opened in the green, supported by gains in Life360 (+3.88%), Catapult Sport (+2.48%), WiseTech (+0.38%) and Xero (+0.58%).
On the data front, the Australian Bureau of Statistics will publish the national accounts for December at 11:30am AEDT.
Australian shares to open lower as four-day Iran war fans inflation fears and oil surges
The news: Australian shares are set to tumble after US stocks traded sharply lower on Tuesday as investors grew concerned the Middle East conflict could persist longer than initially anticipated.
Brent crude briefly rose above USD85 a barrel for the first time since mid-2024, before easing to around USD80 after Donald Trump said the US Navy could escort tankers through the Strait of Hormuz.
The numbers: Updated at 7:38am AEDT:
- ASX futures: down 105 points to 8,928.
- Wall Street: Dow Jones down 0.70%, S&P 500 down 0.88% and the Nasdaq down 1.65%.
- Europe: CAC 40 down 3.46%, DAX down 3.44% and FTSE 100 down 2.75%.
- Spot gold: down 3.98% to USD5,109 per ounce.
- Oil prices: Brent up 4.05% to USD80.86/bbl and US WTI up 3.70% to USD73.82/bbl.
- AUD: down 0.66% at 70.44 US cents.
- Bitcoin: down 0.62% to USD68,431.
The context: All three major US indices traded lower overnight as investors assessed the impact of the conflict, now in its fourth day, on inflation. Oil prices extended gains after Israeli and US forces struck targets across Iran, prompting Iranian retaliatory attacks around the Gulf as the conflict spread to Lebanon.
The S&P 500 initially fell as much as 2.5%, before trimming losses after Trump said the US would escort and insure tankers moving through the Strait of Hormuz. Brent crude pared earlier gains to trade around USD80 a barrel following the comments.
Fears that higher energy prices could lift inflation pushed US Treasury yields higher, though they have eased in afternoon trade as markets shifted expectations for a 25-basis-point interest rate cut by the Federal Reserve to September from July. The 10-year yield hovered close to 4.1%.
Locally, Endeavour Group is set to release half-year earnings at 8:30am AEDT.
