Source : the age
The Australian sharemarket has made an unsteady start to the week amid more uncertainty over a peace deal in the Middle East.
The S&P/ASX 200 slid by 17.8 points, or 0.2 per cent, to 8713.9 in early trade, with nine of 11 industry sectors in negative territory. The US and Iran traded messages over the weekend seeking changes to a draft agreement that would extend a ceasefire and open the vital Strait of Hormuz, but it was unclear if the sides were making much progress.
Energy stocks are weaker this morning as oil prices fell sharply over the weekend before steadying this morning. Brent, the international standard, was fetching just over $US93 a barrel at 10.20am AEST after closing at its lowest since mid-April on Saturday, while West Texas Intermediate was near $US89. Woodside Energy lost 1.8 per cent in early trade while Santos fell 1.4 per cent. Among the refiners, Ampol shed 2.1 per cent and Viva Energy retreated 1.7 per cent.
“Neither Iran nor the US are capitulating or compromising on their red lines for an agreement,” said Hamzeh Al Gaaod, an independent economist for the Middle East and North Africa region. Oil prices are likely to continue moving through a “statement cycle,” with prices swinging between optimism and caution as new headlines emerge, he said.
Mining stocks advanced with BHP up 0.5 per cent, Fortescue 0.8 per cent and Rio Tinto 1.3 per cent. Gold miners advanced, with Northern Star rising 0.7 per cent and Evolution Mining 1.7 per cent higher.
Financial stocks are weaker with Commonwealth Bank falling 1 per cent, National Australia Bank 0.2 per cent, Westpac 0.3 per cent and ANZ Bank 0.8 per cent.
Technology stocks bounced after the sector sent Wall Street higher on Friday. WiseTech soared 5.4 per cent in early trade, Xero 4.7 per cent, Technology One 4 per cent and NEXTDC 1.8 per cent.
The Australian dollar was trading at US71.82¢ at 10.02am AEST.
On Friday on Wall Street, the S&P 500 rose 0.2 per cent, notching its seventh consecutive gain and ninth straight winning week — the longest such streak since 2023. The benchmark index set an all-time high for the fourth day in a row. The Dow Jones gained 0.7 per cent and the Nasdaq composite added 0.2 per cent. The Dow and Nasdaq also reached new heights after posting record highs earlier in the week.
Big technology stocks have been behind much of Wall Street’s record-breaking streak. Their pricey stock values give them more influence in directing the market higher or lower. In May alone, technology stocks within the S&P 500 rose more than 15 per cent, while most of the sectors in the benchmark index actually lost ground.
“The rally has been largely tech-led and supported by resilient earnings, but the key question is whether it can be sustained,” wrote Angelo Kourkafas, senior global strategist at Edward Jones, in a research note.
Microsoft rose 5.4 per cent and Broadcom gained 4.7 per cent.
Dell Technologies surged 32.8 per cent to lead all stocks in the S&P 500 after delivering profits that blew past expectations. The company also raised its outlook, citing powerful demand for AI computing.
Most other sectors in the S&P 500 lost ground Friday. Among the decliners: Paramount Skydance fell 1.9 per cent, Amazon.com dropped 1.2 per cent, and Costco Wholesale closed 3.9 per cent lower.
Treasury yields held relatively steady as oil prices fell. The yield on the 10-year Treasury slipped to 4.44 per cent from 4.45 per cent late on Thursday.
The Fed has been holding its benchmark interest rate steady as it closely watches rising inflation. It is expected to continue holding rates steady at its next meeting in June and through the year, according to CME’s FedWatch tool. Cutting interest rates could help lower borrowing costs and give the economy a jolt, but it could also worsen inflation at a time when prices are already high and rising.
With AP, Bloomberg
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