Shares mixed as fading oil price fails to boost miners
The Australian share market has made another sluggish start to the session as miners hesitate to counter falling oil prices and expected higher global borrowing costs.
The S&P/ASX200 rose 4.6 points at midday, reaching 8,820.7 points, up 0.05 percent, while the broader All Ordinaries index fell 4.9 points, or 0.01 percent, to 9,030.6 points.
Capital.com senior market analyst Kyle Rodda said it was a mixed morning trade following a similar Wall Street session after the tech-heavy Nasdaq crashed as SpaceX, which rose to prominence after its much-hyped and overvalued initial public listing, crashed.
“This move has led to a tech-driven selloff, and the narrative is now shifting towards questions about AI multiples and fair value,” he said.
Outside the tech complex, cyclical stocks rose as significant progress was made in US-Iran negotiations, putting downward pressure on oil prices.
Brent crude is trading at a key level of just over $78 a barrel, the same level as in the early days of the Persian Gulf conflict, putting pressure on domestic energy stocks.
Refinery operator Viva Energy fell particularly sharply, losing more than two per cent, after experiencing mixed results in repairing its Geelong refinery following a fire in April.
Despite falling oil prices, the basic materials sector is heading for losses for a fourth session as an increasingly hawkish outlook on US interest rates continues to weigh on gold stocks and commodity prices.
The precious metal fell as low as US$4,164 ($A5,962) an ounce, effectively erasing Monday’s advance by the All Ordinaries gold subindex.
BHP has lost ground again after falling from all-time highs late last week following a budget overrun and impairment charge at its Jansen potash project in Canada.
Fortescue and Rio Tinto suffered small losses as iron ore futures fell back below US$100 a tonne and copper prices continued to ease after rising since March.
The heavyweight financial sector provided a significant boost to the stock market, rising 0.6 per cent as all four major banks traded higher, led by NAB’s almost one per cent gain, while CommBank shares rose 0.6 per cent to $164.36 per share.
ASX-listed BT shares fell 1.6 per cent following a sharp decline in US tech overnight, but data center operator NextDC bucked the trend with a 0.7 per cent gain.
An early rally for WiseTech Global turned into a 1.6 per cent decline at midday after the company said it was unaware of the Australian Federal Police’s reported investigation into executive chairman and billionaire co-founder Richard White.
In other company news, Santos has begun continuous production operations at its Pikka oil project in Alaska.
The Australian dollar is buying 69.84 US cents at 70.04 US cents at 5pm on Monday; as the dollar strengthens against major currencies as traders weigh on the increasingly hawkish outlook for U.S. interest rates.
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