Share prices are expected to keep falling when trading resumes on the Australian Securities Exchange (ASX) on Thursday, despite stocks closing higher overnight in New York.
An 0.25% fall awaits the ASX 200 index at 10:00 am AEST (12:00 am GMT Wednesday) based on ASX futures trading, which priced the June share price index contract 23 points below the previous settlement at 8,855 points at the time of writing.
No credit appeared to be ascribed to the strength on Wall Street, where all three major stock benchmarks closed up, with the S&P 500 and Nasdaq Composite adding more than 1% to close at record highs.
The Dow Jones Industrial Average rose 0.7%, the S&P 500 climbed 1.1%, and the Nasdaq soared 1.6% after U.S. President Donald Trump extended the ceasefire with Iran, and companies posted solid quarterly results.
CommSec Equity Market Strategist James Gruber said the ASX had already reacted to the ceasefire on Wednesday, and Australian companies were reporting negative impacts from the Middle East war, whereas U.S. companies were not.
“So that’s weighing on the Aussie market,” he said.
Wedbush Securities senior vice president Stephen Massocca said the U.S. stock market was expecting a positive outcome in the Middle East.
"Earnings have been good - now, will they continue to be good if we continue to be at war - it's going to lose a little bit of its oomph. That said, in my world, there's still tremendous value, there's a lot of really cheap stuff out there," he was quoted saying in this Reuters article.
The Australian sharemarket had dropped sharply on Wednesday with the ASX 200 closing down 1.2% due mostly to falls in healthcare companies and banks.
In corporate news today, quarterly updates are scheduled from companies including Newmont (ASX: NEM), Fortescue (ASX: FMG), Pilbara Minerals (ASX: PLS), Sandfire Resources (ASX: SFR) and Perseus Mining (ASX: PRU).
In fixed interest markets, the Australian Government bond yield curve steepened as two-year rates dropped 0.51% to 4.658% and 10-year rates rose 0.26% to 4.973% at the time of writing.
