Australian share prices are set to plunge on Friday after rising oil crude prices, stoked by the war against Iran and inflationary concerns, undermined United States markets.
The ASX 200 index is expected to begin 0.14% below its Thursday closing level at the opening of the Australian Securities Exchange (ASX) at 10:00 am AEDT (11:00 pm GMT Thursday).
This was based on the benchmark’s March futures contract, last trading 125 points under the prior settlement at 8,801 points at the time of writing.
The Brent crude price rose 4.9% to US$85.41 per barrel overnight after the expansion of the six-day-long conflict across the Middle East raised worries about disruption to oil supplies, increases in inflation and slowing economic growth.
U.S. stocks closed down on Thursday (Friday AEDT) as the war entered its sixth day, with the Dow Jones Industrial Average falling 1.6%, the S&P 500 losing 0.6% and the Nasdaq Composite easing 0.3%.
“Look at oil today, it tells you everything you need to know about why the stock market's down," Baird Private Wealth Management market strategist Michael Antonelli was quoted in a Reuters article as saying.
"The market is really trying to grapple with how long this conflict will last".
The Australian sharemarket had regained some of its recent losses on Thursday as technology led eight sectors higher with the ASX 200 ending up 0.4% at 8,940.3 points.
Burrell Stockbroking wealth adviser Adam Dight said he found the last week had been the quietest of the year on the ASX despite the escalating tensions overseas.
“There's actually nothing to do. You can't buy, you can't sell because there's no fundamentals. It’s like a gap week but it could be a gap month,” he said.
But strength in energy stocks like Woodside Energy (ASX: WDS) and Santos (ASX: STO) provided selling opportunities while more potential upside in the gold price meant large producers of the precious metal would be in demand, he said.
In fixed interest markets, Australian Government bond yields dropped as two-year rates dipped 0.14% to 4.332% and 10 year rates eased 0.10% at 4.819%.
