Equities prices on the Australian Securities Exchange (ASX) are expected to sink on Wednesday in the wake of a lower finish on Wall Street as the escalating Middle East conflict sends shockwaves through global economies and markets.
The ASX 200 index should open 1.4% below the previous close when trading resumes at 10:00 am AEDT (11:00 pm GMT Tuesday), based on futures market trading which priced the March share price contract 124 points below the previous settlement at 8,910 points.
Although attention is on the war pitting the United States and its allies against Iran, the market will assess Australian economic growth data to be released at 11:30 am AEDT.
Commonwealth Bank of Australia economists have lifted their gross domestic product (GDP) data forecast for the fourth quarter of 2025 from 0.7% to 1.0%, giving an annual rate of 2.7%.
Commsec Equity Market Strategist James Gruber said the GDP numbers may affect the ASX if they influence the Reserve Bank of Australia’s position on monetary policy.
“That may push the case for interest rate rises sooner rather than later, but I think it will be overwhelmed overnight by other events overnight like oil prices rising as well as the U.S. market slump,” he said.
Stocks in New York ended lower on Tuesday (Wednesday AEDT) but off their lows as investors prepared for the war to worsen with a significant impact on oil prices, inflation, interest rates and global trade.
The Dow Jones Industrial Average closed down 0.8%, the S&P 500 shed 0.9% of its value, and the Nasdaq Composite dropped 1.0%.
Investors are worried about the effect of the four-day-long conflict on inflation as oil prices jumped more than 7% at one point.
“While not much has changed fundamentally since yesterday, investors are growing anxious about the duration of the war and its impact on energy prices," Northern Trust Asset Management Chief Investment Strategist Joseph Tanious was quoted as saying by Reuters.
The ASX had fallen from record highs on Tuesday, with the ASX 200 ending down 1.3% to 9,077.3 points, with energy stocks defying the trend.
Gruber said airline stocks, including Qantas (ASX: QAN) were likely to struggle today, following the share price pattern of travel-related companies overnight.
The same applied to gold and copper miners due to falls in the prices of these metals in offshore markets.
A stock to watch on the ASX will be Endeavour Group (ASX: EDV), which is releasing its earnings.
In fixed interest markets, Australian Government bond yields dipped with two-year rates off by 0.12% at 4.319% and 10 year rates down 0.10% at 4.787%.
