Source : THE AGE NEWS
The Australian sharemarket has fallen at the open while oil prices rose as peace talks between the US and Iran stalled as shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.
The S&P/ASX 200 was down 41 points or 0.5 per cent to 8745.5 in early trade, with 10 of 11 industry sectors in negative territory, with only technology shares in the green.
Oil prices rose this morning, with Brent crude futures advancing 2.1 per cent, to $US107.49 ($150) a barrel, the highest since April 7. US West Texas Intermediate was at $US96.17 a barrel, up 1.9 per cent. Hopes of reviving peace efforts receded during the weekend when US President Donald Trump scrapped a planned trip to Islamabad by his envoys Steve Witkoff and Jared Kushner, even as Iranian Foreign Minister Abbas Araqchi arrived in Pakistan.
“This move puts the ball squarely back in Iran’s court, and the clock is now ticking loudly,” IG market analyst Tony Sycamore said in a note, adding that Tehran may be forced to shut production at its ageing oil fields when it runs out of storage capacity.
Energy stocks are lower in early trade, with Woodside Energy down 1 per cent, Santos 0.8 per cent, Ampol 0.4 per cent and Viva Energy 1.7 per cent. Origin Energy lost 2 per cent after releasing numbers for the March quarter, with LNG revenue falling 12 per cent to $1.86 billion compared to the December quarter.
Financial stocks are weaker. Commonwealth Bank lost 1.2 per cent, National Australia Bank 1.2 per cent, Westpac 0.6 per cent and ANZ Bank 0.7 per cent.
Mining stocks are mixed. Rio Tinto and Fortescue each advanced 0.3 per cent while BHP slipped 0.9 per cent. Gold stocks lost ground, with Northern Star down 1.3 per cent and Evolution Mining 1.2 per cent.
Technology stocks are higher with Xero up 2.4 per cent, Technology One 1.1 per cent and NEXTDC 0.5 per cent but WiseTech shed 0.5 per cent.
The Australian dollar was trading at US71.48 at 10.32am AEST.
On Friday on Wall Street, a surge for Intel following a blowout profit report led the US stock market to more records on Friday, while oil prices kept yo-yoing in the wait for what’s next with the Iran war.
The S&P 500 climbed 0.8 per cent and topped its prior all-time high, which was set on Wednesday. The Dow Jones dipped 79 points, or 0.2 per cent, and the Nasdaq composite rallied 1.6 per cent to its own record thanks to the jump for tech.
Intel led the way and roared past its 2000 peak during the dot-com boom to an all-time high. It soared 23.6 per cent for its best day since 1987 after reporting much stronger results for the first three months of the year than analysts expected. CEO Lip-Bu Tan said the next wave of artificial-intelligence technology is increasing the need for Intel’s chips and products, and the company’s forecast for profit in the spring topped analysts’ estimates.
Such strong profit reports have helped Wall Street rally to records, and the S&P 500 has leaped nearly 13 per cent in a little under a month. Hopes have also built in financial markets that the United States and Iran can find a way to avoid a worst-case scenario for the global economy because of their war.
A ceasefire is tenuously in place between the two, but tensions between them are still keeping oil tankers from passing through the Strait of Hormuz to deliver crude from the Persian Gulf to customers worldwide.
On Wall Street, Procter & Gamble rose 2.5 per cent after reporting stronger profit for the latest quarter than analysts expected. CEO Shailesh Jejurikar said it saw broad-based growth across regions and products, which include Bounty paper towels and Tide detergent.
That helped offset a drop of 25.5 per cent for Charter Communications, whose profit for the latest quarter came in weaker than analysts expected. It lost 120,000 internet customers during the three months, more than some analysts expected.
In the bond market, Treasury yields eased as traders upped their bets on the possibility that the Federal Reserve could resume its cuts to interest rates later this year.
The path appeared to clear Friday for Trump’s nominee to chair the Fed, Kevin Warsh, after the US Justice Department ended its probe into the Fed’s current chair, Jerome Powell.
Senator Thom Tillis, a North Carolina Republican, has said he would oppose Warsh until the investigation was resolved, effectively blocking his confirmation. Warsh is the choice of Trump, who has been arguing loudly for lower interest rates, which could help mortgages and other kinds of loans become less expensive.
Shots were fired as accused gunman tried to storm the ballroom at the White House Correspondents’ Association dinner in Washington on Sunday, resulting in Trump being hurried off the stage and guests ducking for cover beneath their tables.
The yield on the 10-year Treasury dipped to 4.30 per cent from 4.34 per cent late Thursday.
A report in the morning also said sentiment among US consumers remains sour. A survey by the University of Michigan found weaker sentiment in April across political party, income, age, and education, though it improved a bit after the ceasefire in the war with Iran was announced earlier in the month.
