Australian shares tread water as traders weigh conflict

Australia’s stock market started the week flat as renewed conflict in the Persian Gulf pushed up oil prices and weighed on mining stocks.

The S&P/ASX200 increased by 2.5 points, or 0.003 percent, to 8,808.5 points on Monday, while the All Ordinaries index decreased by 0.7 points, or 0.01 percent, to 9,003 points.

“Volatility is leaking out of the market in the ASX200 and I think it’s for good reason,” IG market analyst Tony Sycamore told AAP.

“US earnings season is coming up, there’s Australian earnings season in August, and there’s still some uncertainty about what’s going on in the Middle East and whether the Federal Reserve is done raising rates.”

Miners are under renewed selling pressure after a brief respite on Friday as investors continue to flock to resurgent financial stocks, which have gained more than six percent since mid-June.

Gold producers were sluggish, with the precious metal falling to US$4,054 ($A5,851) per ounce during the session, sending the sub-index down by 1.9 per cent.

The situation for megaminers was complicated; Fortescue gained 1.6 per cent, while Rio lost 0.3 per cent and BHP traded slightly better than flat after calling in industrial arbitration to help prevent strike action at Hedland Port.

Battery minerals and rare earth producers were also sold.

The energy segment rose 0.7 per cent with Brent crude oil trading above $79 per barrel and there is no end in sight to renewed hostilities between the US and Iran.

During the session, Iran increased its attacks on US bases in the Middle East and announced that it had once again stopped traffic in the Strait of Hormuz.

Shares in refinery operator Ampol rose more than four percent after it secured a $400 million subordinated debt facility backed by KKR.

Retail stocks were mixed ahead of Westpac and NAB’s consumer and business surveys due on Tuesday; While discretionary products increased by 0.9 percent, basic food items decreased by the same amount.

IT shares were the worst-performing sector, falling 2.5 per cent, with a huge drop following Xero’s chief executive Sukhinder Singh Cassidy offloading almost $2.2 million worth of stock to manage tax liabilities.

In company news, oOh!Media rose four per cent after it was revealed three suitors were considering takeover bids for the outdoor advertising company.

The Australian dollar is buying 69.29 US cents at 69.50 US cents at 5pm on Friday as safe-haven buyers retreat to the greenback.

Looking ahead, some big global names like JPMorgan Chase, Bank of America, Netflix, Taiwan Semiconductor and Johnson & Johnson will report mid-year earnings this week.

Local earnings season kicks off on July 29 with Rio Tinto’s half-year results.

ON ASX:

* S&P/ASX200 rose 2.5 points or 0.03 percent to 8,808.5 points

* More broadly, All Ordinaries lost 0.7 points, or 0.01 percent, to 9,003

One Australian dollar is traded as follows:

* 69.29 US cents from 69.50 US cents at 5pm (AEST) on Friday

* 112.41 JPY from 112.29 JPY

* From 60.74 euro cents to 60.76 euro cents

* 51.78 British pence from 51.76 pence

* 120.28 New Zealand cents from 120.39 New Zealand cents