Rising tensions between the US and Iran hurt investor sentiment overnight, with European markets closing lower and Wall Street eking out gains. Higher commodity prices could boost the Australian share market.
Market snapshot at 8:15am (AEDT):
- ASX SPI futures +0.5pc at 6,703, ASX 200 (Monday’s close) flat at 6,735
- AUD: 69.39 US cents, 52.71 British pence, 61.98 Euro cents, 75.24 Japanese yen, $NZ1.04
- US: Dow Jones +0.2pc at 28,703, S&P 500 +0.3pc at 3,246, Nasdaq +0.5pc at 9,071
- Europe: FTSE 100 -0.6pc at 7,575, DAX -0.7pc at 13,126, CAC -0.5pc at 6,013, Euro Stoxx 50 -0.3pc at 3,418
- Commodities: Brent crude -0.3pc at $US68.39/barrel, spot gold +1pc at $US1,566.48/ounce
Gold touched its highest price in nearly seven years, as investors sought a safe haven.
Oil prices also continued to rise, with Brent crude topping $US70 per barrel, before paring back some of its gains.
Goldman Sachs said the rally in oil prices could be short-lived and that an actual disruption to global supply is not guaranteed.
“It is not a given that any potential retaliation by Iran would target oil producing assets,” Goldman analysts wrote, forecasting that gold prices would be more likely to keep pushing higher.
However, energy stocks were the best performers on the S&P 500, as Wall Street shook off early losses.
The S&P 500 and the Nasdaq ended higher and the Dow Jones posted a 200-point turnaround to push into positive territory at the close.
“Geopolitical tensions remain centre stage with markets clearly in wait-and-see mode,” said NAB economist Tapas Strickland.
“The potential for this to spiral into a cycle of retaliation remains and markets will likely remain cautious.”
Locally, SPI 200 futures point to a positive start for the Australian share market.
The weekly ANZ-Roy Morgan consumer confidence survey will be released later this morning, which Mr Strickland said will be of greater interest than usual, “to glean the extent to which the bushfire crisis may be weighing on consumers”.