Source : THE AGE NEWS
The Australian sharemarket has edged higher at the open after a drop in oil prices late in the session helped drive Wall Street to its best day in five weeks, while BHP and Woodside Energy have advanced as they announced CEO appointments.
The S&P/ASX 200 added 2 points, or 0.1 per cent, to 8616.3 in early trade, with nine of 11 industry sectors in positive territory. The ASX rose 0.4 per cent on Tuesday as the Reserve Bank announced an expected interest rate hike, but the central bank’s board was split on the widely expected move, boosting speculation that further hikes may be far from certain.
Australia’s biggest mining company, BHP, added 0.3 per cent as it announced that chief Mike Henry would stand down from his role after six years in charge, with BHP Americas chief Brandon Craig to take over in July. Among other iron ore heavyweights, Rio Tinto was flat and Fortescue lost 1 per cent in early trade. Gold miners were mixed, with Northern Star adding 0.6 per cent while Evolution Mining shed 0.5 per cent.
Woodside Energy climbed 1.1 per cent as it announced that interim chief executive Liz Westcott had been appointed to the role on a permanent basis. Westcott has been leading the company since Meg O’Neill left for BP late last year. Santos added 0.3 per cent and Ampol rose 1.3 per cent.
Banking stocks were mixed in early trade with Commonwealth Bank inching up 0.1 per cent but National Australia Bank and Westpac each lost 0.4 per cent while ANZ Bank retreated 1.3 per cent.
Technology stocks are mixed with WiseTech falling 0.5 per cent but Xero added 0.7 per cent, NextDC 1.3 per cent and TechnologyOne 0.4 per cent in early trade.
The Australian dollar was trading at US71.09¢ at 10.45am AEDT. The Federal Reserve will announce its latest interest rates decision at 5am on Thursday.
Overnight, the S&P 500 climbed 1 per cent for its biggest gain in five weeks. The Dow Jones added 387 points, or 0.8 per cent, and the Nasdaq composite jumped 1.2 per cent.
The driver for markets once again was the price of oil. A barrel of benchmark US crude settled at $US93.50, easing some pressure off the economy after topping $US102 earlier in the day. Brent crude, the international standard, settled at $US100.21 per barrel after earlier going as high as $US106.50.
It’s a reprieve, for now at least, after oil prices spiked from roughly $US70 before the United States and Israel began their attacks on Iran. In response, Iran has nearly halted traffic through the narrow Strait of Hormuz, where a fifth of the world’s oil typically sails from the Persian Gulf to customers worldwide. That has oil producers cutting production because their crude has nowhere to go.
The worry in financial markets is that if the strait remains closed for a long time, it could keep enough oil off the market to drive inflation up to a debilitating level for the global economy.
The US stock market has a track record of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don’t stay too high for too long. Many professional investors are expecting that to be the case again, which has helped keep US stock prices near their record levels.
For all its dramatic swings over the last couple of weeks, including several that struck hour to hour, the S&P 500 is only 4 per cent below its all-time high.
Escalations have been mounting quickly in the war, to be sure, but that could suggest “both sides are facing growing constraints that may prevent a long conflict,” according to Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.
On Wall Street, stocks of companies with big fuel bills helped lead the market thanks to falling oil prices. Norwegian Cruise Line Holdings steamed 5.1 per cent higher, while United Airlines climbed 4.2 per cent to trim their big losses for the year so far.
Nvidia, whose chips are powering much of the world’s move into artificial-intelligence technology rose 1.6 per cent as its chief executive, Jensen Huang, talked up the tech’s possibilities at an AI conference and said he foresaw $US1 trillion ($1.4 trillion) in demand for AI chips through 2027. It was the strongest single force lifting the S&P 500.
In stock markets abroad, indexes rose modestly in Europe, including a 0.5 per cent return for Germany’s DAX, following a mixed finish in Asia.
Stocks jumped 1.4 per cent in Hong Kong but slipped 0.3 per cent in Shanghai.
In the bond market, Treasury yields eased as falling oil prices took some pressure off inflation worries. A report showing a weakening of manufacturing activity in New York state also weighed on yields.
The yield on the 10-year Treasury fell to 4.22 per cent from 4.28 per cent late on Friday.
With AP
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