Source : THE AGE NEWS
By Staff reporter
The Australian sharemarket has extended its losses on Friday after explosions rang out in Iran’s capital Tehran, but energy and gold stocks have soared.
The ASX 200 opened higher but fell into negative territory after the strikes were reported, with Israel claiming responsibility for the incident. The index was 21.8 points, or 0.3 per cent lower at 8563.6 at 12.37pm AEST, with four of 11 industry sectors in the green.
Wall Street rose after another encouraging update on inflation. Credit: AP
Energy stocks jumped as oil prices soared by more than 10 per cent. Woodside surged 5.8 per cent just after midday while Santos was 3.5 per cent higher. Gold miners jumped as the spot price of the safe haven rose. Newmont jumped 5.2 per cent, Evolution added 4.6 per cent, and Northern Star Resources rose 3.8 per cent.
Among other miners, Fortescue slipped 0.3 per cent, Rio Tinto lost 0.8 per cent and BHP dove 2.3 per cent.
The big four banks retreated. Westpac fell 0.8 per cent, ANZ dropped 0.6 per cent, while Commonwealth Bank and National Australia Bank each lost 0.3 per cent.
Overnight, the S&P 500 rose 0.4 per cent to pull back with 1.6 per cent of its record. The Dow Jones added 101 points, or 0.2 per cent, and the Nasdaq composite gained 0.2 per cent.
The Australian sharemarket is set to rise, with futures at 6.10am AEST pointing to a gain of 40 points, or 0.6 per cent, at the open. The ASX lost 0.3 per cent on Thursday.
Oracle pushed upward on Wall Street after jumping 13.3 per cent. The tech giant delivered stronger profit and revenue for the latest quarter than analysts expected, and CEO Safra Catz said it expects revenue growth “will be dramatically higher” in its upcoming fiscal year.
That helped offset a 4.8 per cent loss for Boeing after Air India said a London-bound flight crashed shortly after taking off from Ahmedabad airport with 242 passengers and crew onboard. The Boeing 787 Dreamliner crashed into a residential area near the airport five minutes after taking off. The cause of the crash wasn’t immediately known.
Stocks broadly got some help from easing Treasury yields in the bond market following the latest update on inflation. Thursday’s said inflation at the wholesale level wasn’t as bad last month as economists expected, and it followed a report on Wednesday saying something similar about the inflation that US consumers are feeling.
Wall Street took it as a signal that the Federal Reserve will have more leeway to cut interest rates later this year in order to give the economy a boost.
The Federal Reserve has been hesitant to lower interest rates, and it’s been on hold this year after cutting at the end of last year, because it’s waiting to see how much President Donald Trump’s tariffs will hurt the economy and raise inflation. While lower rates can goose the economy by encouraging businesses and households to borrow, they can also accelerate inflation.
The yield on the 10-year Treasury fell to 4.35 per cent from 4.41 per cent late on Wednesday and from roughly 4.80 per cent early this year.
Smoke rises in Tehran, Iran amid Israeli airstrikes.Credit: NYT
Besides the inflation data, a separate report on jobless claims also helped to weigh on Treasury yields. It said slightly more US workers applied for unemployment benefits last week than economists expected, and the total number remained at the highest level in eight months. That could be an indication of a rise in layoffs across the country.
“We believe that were it not for the uncertainty caused by the tariffs, the combined information coming from the inflation and labour-market data would have compelled the Fed to have resumed cutting its policy rate by now,” according to Thierry Wizman, a strategist at Macquarie.
The Fed’s next meeting on interest rates is scheduled for next week, but the nearly unanimous expectation on Wall Street is that it will stand pat again. Traders are betting it’s likely to begin cutting in September, according to data from CME Group.
Trump’s on-and-off tariffs have raised worries about higher inflation and a possible recession, which had sent the S&P 500 roughly 20 per cent below its record a couple months ago. But stocks have since rallied nearly all the way back on hopes that Trump will lower his tariffs after reaching trade deals with other countries.
Many of Trump’s tariffs are on hold at the moment to give time for negotiations, but Trump added to the uncertainty late on Wednesday when he suggested the United States could send letters to other countries at some point “saying this is the deal. You can take it or you can leave it.”
On Wall Street, Chime Financial jumped 37.4 per cent in its first day of trading on the Nasdaq. The technology company is trying to be the main financial hub for customers, connecting them with its bank partners.
GameStop dropped 22.5 per cent after saying it plans to raise $US1.75 billion ($2.7 billion) by borrowing at zero interest rates, though the lenders could choose to be repaid in the video-game retailer’s stock instead of cash.
All told, the S&P 500 rose 23.02 points to 6,045.26. The Dow Jones Industrial Average added 101.85 to 42,967.62, and the Nasdaq composite gained 46.61 to 19,662.48.
In stock markets abroad, indexes were mixed across Europe and Asia amid mostly modest movements. Hong Kong’s Hang Seng was an outlier, and it tumbled 1.4 per cent to give back some of its strong recent gains.
Hong Kong’s index is still up nearly 20 per cent for the year so far, towering over the US stock market’s gain of less than 3 per cent.
With AP
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