The Morning Catch-Up: ASX set to edge higher as Wall Street steadies and oil rebounds Proactive uses images sourced from Shutterstock
Australian shares are expected to open slightly higher today after a volatile session on Wall Street, where US equities fought for gains despite pressure from major technology stocks.
S&P/ASX 200 futures were up 9 points, or 0.1%, to 8,755, suggesting a modestly firmer start for the local market.
The positive lead comes as global investors weigh stronger economic data, higher commodity prices and renewed geopolitical concerns after a UK maritime agency reported that a cargo ship was hit while attempting to transit the Strait of Hormuz.
Oil prices rallied more than 2% on the news, reigniting concerns over Middle East supply routes.
Resources drag ASX lower yesterday
The Australian share market closed lower on Thursday, weighed down by resources stocks as oil and gold prices fell and a stronger-than-expected jobs report added uncertainty to the interest rate outlook.
The S&P/ASX 200 Index dropped 59.70 points, or 0.7%, to 8,748.70 at the close, with 4 of the 11 sectors finishing in negative territory.
Markets focused on Australian labour market data, which showed the unemployment rate falling to 4.4%, while 40,300 jobs were added in May, well above forecasts.
Bell Potter’s Richard Coppleson said the stronger employment print “pretty much cements an RBA rate hike”, adding that the market, led by banks, sold off after the data.
Bond traders are pricing in about a 20% chance of an interest rate increase in August and a 48% chance by the end of the year.
Energy was the weakest sector as oil prices fell. Woodside Energy dropped 2.9% to $27.43 and Santos lost 2.8% to $7.04.
Materials also came under pressure as gold miners retreated. Newmont fell 3.1% to $134.37, Northern Star dropped 3.3% to $19.92 and BHP lost 1.7% to $58.52.
Banks were weaker, led by Judo Capital, which plunged 40.4% to a 2023 low of 91.5 cents after issuing a profit downgrade linked to a spike in bad loans and higher risk-management costs.
Among the big 4 banks, National Australia Bank fell 3.4% to $37.45, while Westpac, ANZ and Commonwealth Bank lost between 1% and 2%.
Defensive stocks found support, with healthcare the strongest sector. CSL rose 2.3% to $117.65 and Cochlear gained 2.7% to $116.55, while Coles and Woolworths both rose more than 1%.
Wall Street mixed as Big Tech weighs
US share markets were mixed on Thursday as losses across major technology stocks weighed on the Nasdaq, while strength in industrials helped the Dow edge higher.
The Dow Jones Industrial Average finished up 0.1%, the S&P 500 was broadly flat and the Nasdaq fell 0.5%.