Tag: ASX

Global markets rally as US-Iran conflict avoids escalation, ASX follows


Global markets have rallied overnight, as fears of further escalation in the US-Iran conflict subsided for now. Wall Street rose and the Australian share market followed that positive lead.

Key points:

  • The ASX 200 closed 0.8 per cent higher at 6,874
  • Most major banks and mining stocks rose
  • The energy sector and gold miners lost ground

At the close of trade, the benchmark ASX 200 index was 0.8 per cent higher at 6,874.

Most blue chip stocks — such as three of the big four banks, BHP and Telstra — rose, while energy stocks lagged following a retreat in oil prices, with Brent crude falling as much as 4 per cent overnight.

During Australian and Asian trade yesterday, US stock market futures fell sharply, as Iran launched missile strikes on Iraqi bases housing US troops.

Stocks across the region fell, before recovering some of the losses after US President Donald Trump did not deliver an immediate response and tweeted “all is well”.

US futures recovered and Wall Street rose strongly during the session, with the S&P 500 and the Nasdaq hitting fresh record highs, before paring gains into the close.

Market snapshot at 8:20am (AEDT):

  • ASX SPI futures +0.7pc at 6,798, ASX 200 (Wednesday’s close) -0.1pc at 6,817
  • AUD: 68.70 US cents, 52.45 British pence, 61.84 Euro cents, 74.98 Japanese yen, $NZ1.03
  • US: Dow Jones +0.6pc at 28,745, S&P 500 +0.5pc at 3,253, Nasdaq +0.7pc at 9,129
  • Europe: FTSE 100 flat at 7,574, DAX +0.7pc at 13,320, CAC +0.3pc at 6,031, Euro Stoxx 50 +0.1pc at 3,424
  • Commodities: Brent crude -3pc at $US66.20/barrel, spot gold -1.1pc at $US1,556.35/ounce

Shares in Boeing lost more than 1 per cent, after one of its planes crashed shortly after take-off from Tehran, killing all 176 people on board.

In European trade, stocks rebounded from early losses.

Airlines reroute flights in Middle East

The oil price pullback will be good news for the fuel costs of global airlines, if it lasts, however, higher fuel bills may still be in store.

Qantas, along with international airlines including Germany’s Lufthansa, Air France, Singapore Airlines and Malaysia Airlines have rerouted flights to avoid airspace over Iran and Iraq, due to the tensions with the US.

Airline analysts have told Reuters the longer journey times will increase fuel usage, throw off schedules and add to operating costs.

On Wednesday, Qantas said its Perth to London flight would have an increased flying time of 40 to 50 minutes due to its redirected flight path, and passenger numbers would need to be reduced in order to carry more fuel.

Source: https://www.abc.net.au/news

Australian shares, US futures rebound after Iran says it doesn’t want war


The Australian share market has closed lower, but pulled back from steeper earlier losses, after Iran’s foreign minister said its strikes against US forces in Iraq “concluded proportionate measures in self-defence” following the US killing of an Iranian general.

Key points:

  • US officials have confirmed rockets have been fired at the Al-Asad and Erbil airbases in Iraq, which host US forces
  • The Australian share market and US stock market futures fell sharply on the initial news
  • Markets recovered some of those losses in the afternoon as the Iranian foreign minister said “self-defence measures” had “concluded”

In an escalation feared by markets, US officials this morning confirmed rockets had been fired at the Al-Asad and Erbil airbases in Iraq, which host US forces.

US stock market futures initially fell sharply in response to the news, with S&P 500 and Dow Jones futures both falling as much as 1 per cent.

The Australian share market has also took a hit, with the ASX 200 also down close to a per cent at its worst.

Tokyo’s Nikkei initially fell more than 2 per cent, while New Zealand’s main index also lost more than 1 per cent.

However, US futures recovered in afternoon trade, after Iran’s foreign minister Mohammad Javad Zarif said on Twitter that the regime had “concluded proportionate measures in self-defence” and did “not seek escalation or war”, while adding “but will defend ourselves against any aggression”.

External Link:

@JZarif (Iran's Foreign Minister): "Iran took & concluded proportionate measures in self-defense under Article 51 of UN Charter targeting base from which cowardly armed attack against our citizens & senior officials were launched. We do not seek escalation or war, but will defend ourselves against any aggression."

Australia’s share market followed the recovery in US futures, closing just 0.1 per cent lower for the day at 6,818 for the ASX 200 index.

Gold was the major beneficiary of the tensions, having jumped around $US35 an ounce this morning to around $US1,610/ounce as investors sought safe havens amid fears of an escalating conflict between the US and Iran.

That briefly took it to a fresh Australian dollar record price of $2,351.86/ounce.

However, the precious metal eased back to $US1,592/ounce after the Iranian foreign minister’s tweet was seen as lowering tensions.

Oil prices have remained elevated, however, with Brent crude still more than 1 per cent higher at $US69.08 a barrel, although it had risen further in earlier trade.

Aussie dollar back below 69 US cents

The Australian dollar has fallen back below 69 US cents and is weaker against a basket of currencies, as the US dollar rises after America’s trade deficit fell to a three-year low.

By 5:13pm (AEDT) the local currency was worth 68.7 US cents.

The currency had traded above 70 US cents at the very start of the new year, but has tracked lower over the past week.

Stronger economic data out of the United States contributed to the Aussie dollar’s decline against the greenback overnight.

Market snapshot at 8:15am (AEDT):

  • ASX SPI futures +0.04pc at 6,767, ASX 200 (Tuesday’s close) +1.3pc at 6,826
  • AUD: 68.65 US cents, 52.35 British pence, 61.61 Euro cents, 75.53 Japanese yen, $NZ1.03
  • US: Dow Jones -0.4pc at 28,581, S&P 500 -0.3pc at 3,237, Nasdaq -0.03pc at 9,068
  • Europe: FTSE 100 -0.02pc at 7,573, DAX +0.8pc at 13,226, CAC -0.02pc at 6,012, Euro Stoxx 50 flat at 3,419
  • Commodities: Brent crude -1pc at $US68.21/barrel, spot gold +0.4pc at $US1,571.75/ounce

Amid the US-China trade dispute, US imports fell and exports rose in November, while the closely-watched goods deficit with China tumbled by more than 15 per cent.

The US services sector strengthened, with data showing an improvement in non-manufacturing business activity.

However, it was not only a stronger US dollar that hurt the Australian dollar. Domestically, analysts have begun to weigh up the economic impact of a devastating, and ongoing, bushfire season.

On Tuesday, the ANZ-Roy Morgan weekly survey of consumer confidence fell to its lowest level in more than four years.

“A drop in confidence at the start of the year is unusual and almost certainly reflects the impact of the catastrophic bushfires over the weekend,” said ANZ’s head of Australian economist David Plank.

ANZ’s monthly indicator of job advertisements fell 6.7 per cent in December, with economists also blaming the impact of the bushfires.

“Based on previous major natural disasters, such as Victoria’s Black Saturday fires and Queensland’s 2010-11 floods, the current bushfires could see a short-term negative impact on employment,” said ANZ senior economist Catherine Birch.

Source: https://www.abc.net.au/news

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