ASX plunges to a 10-month low as Middle East conflict continues
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More news: Australian shares fell sharply at the open to a 10-month low as the US-Iran conflict enters its fourth week, with no near-term resolution in place.
The benchmark ASX 200 was down by 148.6 points, or 1.76%, to 8,279 at 10:35am AEDT. Nine of the 11 sectorial indices opened in the red.
Energy (+0.69) opened slightly higher and was the strongest performing sector, supported by gains in Viva Energy (+3.60%), Karoon Energy (+2.03%), Woodside Energy (+1.32%) and Santos (+1.31%), as volatility in oil prices persisted after US and Iran exchanged verbal threats over the weekend.
Aside from energy companies, Life360 (+1.82%), Block (+1.82%), Insignia Financials (+1.17%) and Medibank (+0.95%) were among the strongest performing stocks at the open.
Elsewhere, mining (-3.78%) saw a steep sell off at the open, weighed down by Pantoro Gold (-10.11%), Catalyst Metals (-10.03%), Resolute Mining (-8.17%) and Greatland Resources (-8.11%), after gold recorded the biggest weekly drop in over 40 years.
Tech (-3.02%) was the second weakest performing sector, dragged by sell offs in WiseTech (-3.34%), Xero (-2.13%), NextDC (-4.55%) and Codan (-4.11%).
Additionally, European Commission President Ursula von der Leyen is scheduled to arrive in Sydney today amid expectations she will sign a free-trade agreement with Australia this week.
Australian shares to open lower as US-Iran conflict drags into fourth week
The news: Australian shares are set to open lower after Wall Street closed sharply lower on Friday, as oil prices edge higher and investors brace for further volatility amid the escalating US-Iran conflict, now entering its fourth week.
The numbers: Updated at 7:40am AEDT:
- ASX futures: down 134 points to 8,337.
- Wall Street: Dow Jones down 0.95%, S&P 500 down 1.51% and the Nasdaq down 2.01%.
- Europe: CAC 40 down 1.82%, DAX down 2.01% and FTSE 100 down 1.44%.
- Spot gold: down 3.48% to USD4,488 per ounce.
- Oil prices: Brent up 2.26% to USD112.19/bbl and US WTI down 2.80% to USD98.23/bbl.
- AUD: down 0.92% at 70.21 US cents.
- Bitcoin: down 0.77% to USD68,155.
The context: All three major US indices fell sharply on Friday, marking a third consecutive day of losses, led by Nasdaq, which dropped 2% and now stands about 9.5% below its record high. The S&P 500 closed at its lowest level in six months.
The sell off accelerated as traders began pricing in the risk that the Federal Reserve could shift towards hiking interest rates this year, with elevated oil prices threatening a renewed inflation shock.
A 48-hour ultimatum has been issued by Donald Trump to Tehran to reopen the Strait of Hormuz or face strikes on its power plants, with the deadline set to expire Monday evening in New York. In response, Iran’s military joint command, Khatam al-Anbiya, warned the strait would be “fully closed” if such strikes occurred and would remain shut until damaged plants were rebuilt, signalling both sides are at risk of further escalating the conflict.
Brent crude rose 3.3% to USD112 a barrel, taking the weekly gains to 8.8% and year-on-year gains to 84%. Gold fell, ending the week down 9.5%, its steepest weekly decline since 2011.
Locally, European Commission President Ursula von der Leyen is scheduled to arrive in Sydney today amid expectations she will sign a free-trade agreement with Australia this week.
