Wall Street surges on hopes the war will end, ASX set to rise
Staff writers
Updated ,first published
The Australian share market opened after Wall Street recorded its best session of the year as doubts turned to hopes for a possible end to the war with Iran.
The ASX/S&P 200 index rose 137 points, or 1.6 per cent, to 8618.80 in early trade on growing optimism that the Middle East conflict would soon end following overnight statements from US President Donald Trump and Iranian President Masoud Pezeshkian. The Australian dollar was stronger at US69.08¢ at 10.25am AEDT.
The local gains came after the S&P 500 rose 2.9 percent overnight, its biggest gain since May. Just a day earlier, war-related concerns were continuing to plague a key gauge of Wall Street’s health, approaching a 10 percent correction from all-time highs earlier this year. The Dow Jones rose 2.5 percent overnight, while the Nasdaq composite rose 3.8 percent.
Optimism entered the markets on Tuesday afternoon Wall StreetJournal Trump reportedly told aides that the United States is willing to end its war against Iran even if the Strait of Hormuz remains largely closed. This was further fueled by a report from the Middle East in which Pezeshkian was quoted as saying that Iran had the “necessary will to end the war” as long as certain requirements were met, including “guarantees to prevent recurrence of aggression”.
After Wall Street closed, Trump said the United States would leave Iran “very soon” and that Iran would likely not blockade the strait, a key transit route for about 20 percent of the world’s oil, after the U.S. completes its operation.
The barrel price of Brent crude oil, the international standard, fell by 3.2 percent to $103.97. Benchmark US crude oil erased its gains and settled at $101.38, losing 1.5 percent.
The market is “definitely looking for a reason to rally,” said Jack Janasiewicz, portfolio manager at Natixis Investment Managers. “The question for us is, how real is this?”
Local stocks rose as mining stocks rose. BHP was up 4.1 percent, Rio Tinto was up 3.2 percent and Fortescue was up 1.9 percent. Gold stocks rose as safe-haven prices continued to strengthen. Northern Star jumped 7.2 percent and Evolution Mining gained 6.7 percent.
All four major banks rose as financial stocks strengthened. Commonwealth Bank was up 0.9 per cent, Westpac was up 0.5 per cent, National Australia Bank was up 0.9 per cent and ANZ Bank was up 1.1 per cent.
Energy stocks lost value due to the decline in oil prices; In early trading, Woodside Energy lost 2.5 percent, Santos lost 2.3 percent, Ampol lost 2.9 percent and Viva Energy lost 2.7 percent.
Meanwhile, a softer oil price is good news for airlines; It caused Qantas and Virgin Australia to increase by 2.8 percent and 3.3 percent respectively.
Technology stocks rose, with WiseTech gaining 3.6 percent and Xero rising 3.4 percent, trailing its peers on Wall Street; These shares rose as bargain hunters returned to the sector.
Falling oil prices on Wall Street helped shares of companies with large fuel bills. While United Airlines gained 8.1 percent in value, Norwegian Cruise Line Holding increased by 5.9 percent to reduce its losses during the year.
In the widespread rise in which four out of every five stocks in the S&P 500 rose, the strongest force lifting the market was technology stocks. Marvell Technology rose 12.8 per cent after Nvidia announced it would invest US$2 billion ($2.9 billion) in the company and partner with it. Nvidia became the strongest force lifting the S&P 500, rising 5.6 percent.
Centessa Pharmaceuticals rose 44 percent after Eli Lilly said it was acquiring the company that works on treatments for excessive daytime sleepiness and other neurological disorders. Shares of Lilly, which will pay up to $7.8 billion if certain conditions are met, increased by 3.7 percent.
Bond yields remained low on Tuesday after several reports that the U.S. economy was doing better than economists expected. Confidence among U.S. consumers has unexpectedly increased, one said. Another said U.S. employers posted more jobs than expected at the end of February, but fewer than the previous month.
AI giant OpenAI has closed a US$122 billion deal valuing US$852 billion from investors; This marks the company’s largest funding round to date and powers its costly push for more chips, data centers and talent.
AP via Bloomberg
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