ASX opens lower, energy stocks rally on US-Iran tension
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More news: Australian shares opened lower, dragged down by losses across the tech and financials sectors.
The benchmark ASX 200 was down by 46.2 points, or 0.50%, to 9,152 at 10:31am AEDT. Eight of the 11 sectoral indices opened in the red.
Energy (+5.06%) was the best performing sector at the open, supported by gains in Woodside Energy (+7.67%), Santos (+7.77%), Yancoal (+6.66%) and Beach Energy (+10.96%).
Karoon Energy (+17.47%) surged at the open, and is set to be the best performing stock following US-Israel attack on Iran which disrupted oil shipments through the Strait of Hormuz. This led Brent crude to climb 13% to USD82 a barrel.
Elsewhere, tech (-2.91%) was the worst performing sector, led by losses in WiseTech (-5.18%), Xero (-5.24%), Macquarie Tech (-5.97%) and Megaport (-4.66%).
Siteminder (-8.05%), Flight Centre (-6.93%), Zip (-6.93%) and Web Travel (-5.88%) were among the worst performing stocks across the ASX 200.
Australian shares to open lower as global markets brace for US-Iran tension
The news: Australian shares are set to open lower as escalating conflict in the Middle East weighs on investor sentiment, amid concerns over a potential power struggle in Iran and the risk of a prolonged regional war with implications for global trade to inflation.
Commodity markets are bracing for a surge in oil prices after tanker traffic through the Strait of Hormuz largely came to a halt.
The numbers: Updated at 7:56am AEDT:
- ASX futures: down 20 points to 9,145.
- Wall Street: Dow Jones down 1.05%, S&P 500 down 0.43% and the Nasdaq down 0.92%.
- Europe: CAC 40 down 0.47%, DAX down 0.02% and FTSE 100 up 0.59%.
- Spot gold: up 1.80% to USD5,278 per ounce.
- Oil prices: Brent up 2.87% to USD72.87/bbl and US WTI up 2.78% to USD67.02/bbl.
- AUD: up 0.14% at 71.15 US cents.
- Bitcoin: down 2.46% to USD65,322.
The context: The Middle East escalation follows US-Israel strikes that killed Iran’s Supreme Leader Ayatollah Ali Khamenei on Saturday, triggering retaliatory attacks on Gulf cities. Airlines suspended flights and tankers halted transit through the Strait of Hormuz, a crucial oil shipping route. Iran attacked three oil tankers, while shipowners and trades imposed a pause on vessel movements through the waterway.
Brent crude rose 10% to around USD80 a barrel in over the counter trade on Sunday, according to oil traders. Reuters cited analysts predicted that oil prices could climb as high as USD100 following the strikes, with more than 20% of global oil transiting the Strait of Hormuz.
The OPEC+ group agreed on Sunday to increase output by 206,000 barrels per day from April, a modest rise equivalent to less than 0.2% of global demand.
According to Bloomberg, several analysts and traders expect the US to take steps to ensure shipping resumes through the Strait of Hormuz. President Donald Trump has repeatedly called for lower oil prices, and a sustained rise in fuel inflation would add pressure on the administration to bring a fast end to the conflict.
On Wall Street, the three major US indices fell on Friday, as stocks sold off on the last trading day of February, capping a month marked by heightened anxiety over the impact of artificial intelligence.
Locally, the Australian Bureau of Statistics is scheduled to release business indicators for December at 11:30am AEDT.
