Australian shares opened down on Monday as renewed uncertainty over the Middle East peace process pushes oil prices higher and revives concerns that inflation pressures could keep interest rates elevated.
By 10:20 am AEST (12:20 am GMT), the ASX 200 index was trading 0.3% lower.
The opening move extended losses from last week as investors digest Iran’s claim that it has closed the Strait of Hormuz, one of the world’s most important oil shipping routes.
The uncertainty comes after United States markets remained closed on Friday for the Juneteenth public holiday, leaving Australian investors reliant on futures markets and weekend developments for direction.
“The war premium [in oil] has been eroding as the market has begun to see a path toward more normal physical flows, greater supply, and a less immediate threat to global inflation,” SPI Asset Management managing partner Stephen Innes was quoted as saying in a Reuters article.
“But this is not a clean peace dividend. It is a fragile bridge over a still-moving river as [U.S. Vice President] JD Vance heads to Switzerland for the first leg of the peace deal journey.”
Shares had finished down in Australia on Friday with the ASX 200 Index falling 0.9% to 8,828.7 as six of the 11 sectors finished in negative territory.
Stocks to watch today include Metcash (ASX: MTS), which reported full-year results, and SGH (ASX: SGH), which announced a buyback, and still has room for buyout.
On the bond markets, yields on Australian Government bonds fell, with two-year rates down 1.19% to 4.488% and 10-year rates off 0.29% to 4.814% at the time of writing.
