ASX dips as tech stocks continue to slump; oil prices rise
Stan Choe
Updated ,first published
Australia’s stock market fell slightly on Friday, but the local stock market held on to most of its gains from earlier in the week as investors remained cautiously optimistic about the fragile ceasefire in the Middle East.
The S&P/ASX200 fell 0.14 per cent to 8960 on Friday, recovering after a more significant decline in early trade than futures markets had anticipated. Only three of the ASX’s 11 industrial sectors finished the day in the green.
Most of the day’s decline was overcome by technology stocks, which continued yesterday’s decline. Wisetech and Xero fell 2.5 and 2.6 percent respectively, despite the US’s tech-heavy Nasdaq composite rising 0.8 percent overnight, continuing a tough year in which the sector has fallen almost 30 percent since January.
Industrial and energy stocks are also declining. Toll road operator Transurban fell 1.9 percent, and coal producers also fell; Yancoal fell 3 per cent and Whitehaven 3.2 per cent.
The Australian dollar was trading at 70.6¢ at 4.55pm.
Wall Street ended the night with a 0.6 percent gain after the Israeli prime minister authorized direct negotiations with Lebanon. This eased concerns that the two-week ceasefire announced this week may already be in trouble due to Israel’s bombing of Lebanon.
The Dow Jones Industrial Average rebounded from early losses, rising 275 points, or 0.6 percent.
Crude oil prices gave back some of their gains but still remained high on the day due to uncertainty about exactly when oil tankers will be able to pass through the Strait of Hormuz. The narrow waterway has been at the center of US President Donald Trump’s demands against Iran, and blockages there have kept oil and gas stuck in the Persian Gulf and away from customers around the world.
The barrel price of benchmark US crude oil settled at US$ 97.87, up 3.7 percent, after briefly approaching US$103 in the morning. Brent crude oil, the international standard, rose 1.2 percent to $95.92 per barrel.
Given how far apart the United States and Iran appear to be in terms of their demands, upward pressure on oil prices “could be here to stay for a while,” according to Macquarie strategists led by Thierry Wizman. Risks of resumption of wars remain; This could lead customers around the world to hoard their oil resources. This could keep oil off the market, just like actual fights targeting pipelines or oil tankers.
Oil prices have been experiencing sharp and sudden turns for weeks as hopes rise and fall that the Strait of Hormuz will fully reopen, allowing oil and gas production to pick up again. Brent crude rose from around US$70 per barrel before the war to above US$119 at times in late February.
Despite all the volatility, the US stock market is not far from its all-time high. The S&P 500 is just 2.2 percent below January’s record.
Constellation Brands had one of the index’s biggest gains, rising 8.5 percent after reporting stronger results than analysts expected in the latest quarter. The company, which sells Modelo beer and Robert Mondavi wines, said it was seeing encouraging trends heading into the new fiscal year. But it withdrew its financial forecasts for the next fiscal year due to “limited short-term visibility” and other factors.
CoreWeave rose 3.5 percent after announcing an expanded $21 billion deal with Meta Platforms to provide AI cloud capacity through December 2032. The commodity rose 2.6 percent.
On Wall Street’s losing side was Simply Good Foods, which fell 18.1 percent after reporting a worse revenue decline than analysts expected. Chief executive Joe Scalzo called the results inadequate and said the company behind the Quest and Atkins brands was making immediate changes to improve its performance. It was also a bad day for Australia-based Atlassian; Its shares fell 7.3 percent.
Overall, the S&P 500 rose 41.85 points to 6,824.66. The Dow Jones Industrial Average rose 275.88 to 48,185.80, and the Nasdaq composite index rose 187.42 to 22,822.42.
Mixed reports on the U.S. economy also helped keep Wall Street in check. The key measure of inflation that the Fed considers important was slightly warmer in February than economists expected, one said. It slowed before the war with Iran began, but not as much as economists expected.
More U.S. workers applied for unemployment benefits last week than economists expected, a separate report said. Although this figure is not very high compared to the past, it may indicate that layoffs are accelerating.
Following the reports, treasury yields in the bond market moved up and down and then approached the previous day’s levels.
The yield on the 10-year Treasury note fell to 4.28 percent from 4.29 percent on Wednesday. It’s still well above the prewar level of 3.97 percent, which sent rates for mortgages and other types of loans to U.S. households and businesses even higher.
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