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Chapter 1: What is the main topic discussed in this episode?
A listener production.
Fresh US-Iran fighting sends oil higher and stocks tumbling. The ASX set to fall at the open and the RBA governor to appear before the Senate today. Hello, good morning. I'm James Gruber. It's Thursday, the 4th of June, and this is the morning edition of the ComSec Market Update.
Chapter 2: What recent events have increased oil prices and affected stock markets?
Well, the Iran war came back into sharper focus overnight amid renewed fighting between the US and Iran. Iran attacked Kuwait's main airport with drones, killing one person and injuring 60 others. Meantime, the US carried out strikes near the Strait of Hormuz. The fresh fighting was among the most intense since the April ceasefire and came as diplomatic efforts have stalled.
As you can imagine, the renewed tensions weren't great for stock markets and oil spurted higher on the news. Let's take a deeper look at what's happened with Aussie futures, commodities and currencies. The ASX is poised to open lower with index futures down 0.7%. As for the ASX 200 yesterday, it closed at a nearly one-month high, up 0.7% to 8,786.
Miners scored a record close, with sector heavyweights BHP and Rio Tinto hitting all-time closing highs. and financials recouped early losses to close 0.8% higher. Today is expected to be a tough day for most sectors, with energy stocks likely to be a standout given the higher oil prices overnight.
And on commodity markets and those oil prices, oil rose, extending gains from the previous session as hostilities in the
Chapter 3: How are Australian stocks expected to perform in light of global tensions?
Brent crude futures settled up nearly 2% to US$97.81 a barrel. Base metal prices fell on the intensifying fighting in the Middle East. Copper futures dropped 2.5% while aluminium futures dipped 0.7%. Gold futures slipped on bets of higher rates as the Iran war fuelled inflation fears. The futures settled 1.6% lower at US$4,448 an ounce.
Einolf futures meantime declined amid weakening steel demand in China and narrow profit margins for steel producers. The futures settled down 1.4% to US$103.71 a tonne. Let's now take a look at currencies. They were lower against the US dollar as the dollar once again became a safe haven during heightened Middle East tensions. The euro fell 0.3% to 1.1598 US dollars.
The Japanese yen lost 0.1% to 160.07 yen. And the Aussie dollar sank 0.7% to 71.30 US cents. Let's now head to Wall Street. The Dow Jones Index finished down 1.2%, the S&P 500 was 0.7% lower, and the Nasdaq lost 0.9%. A closer look at the trading day there. U.S.
share markets retreated on Wednesday after a run of record highs, while a fresh Middle East flare-up pushed oil prices higher and cast doubts over a quick end to the war. Stocks and sectors that led gains in recent days logged the steepest declines. Software stocks shed 4%. Datadog, Palo Alto and IBM fell between 5.8% and 7%.
Six of the 11 S&P 500 sectors were in the red, with financials among the leading decliners. Asset managers dropped after Switzerland's Partners Group capped withdrawals. from an US$8.6 billion private equity fund. KKR, Blackstone, Blue Owl and Ares Management fell between 3.6% and 4.3%. The Philadelphia Chip Index rose 1.4%.
Broadcom shares added 0.3% ahead of the company's quarterly report due after market closed today. Marvel Technology extended gains with a 3.8% rise, hitting $250 billion in market value a day after NVIDIA CEO Jensen Huang called the chipmaker the next trillion-dollar company. U.S. government bond yields were higher as tensions in the Middle East reignited following strikes by both the U.S.
and Iran, sending oil prices higher. raising concerns about sustained inflation pressures. The U.S. 10-year Treasury yield was three points higher at 4.49%, while the U.S. 2-year Treasury yield rose three points to 4.08%. To the European markets, the continent-wide FTSE Euro First 300 index fell 0.7% and the UK FTSE 100 dipped 0.4%.
Europe slipped on Wednesday as escalating Middle East tensions and fresh jitters over private markets pushed investors out of riskier assets, though gains in retailers helped limit losses. Financial services-led sector declines with a 2.4% drop as Partners Group shed 16% after the Swiss private market's firm restricted redemptions in one of its evergreen private equity funds.
Retail has provided some support. B&M European Value Retail jumped 15% after its annual adjusted core profit beat estimates. Zara owner Inditex gained 1.5% after reporting a strong start to summer trading, easing worries that inflation could curb consumer spending. It's now time for The Watch List. In Australia, the goods trade balance for April is out today.
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