Australian share prices are set to open little changed on Wednesday in the wake of a mixed night on Wall Street as markets monitored developments ahead of United States President Donald Trump's deadline for Iran to open the Strait of Hormuz.
The ASX 200 index was expected to start just 0.14% over the prior close when trading resumes on the Australian Securities Exchange (ASX) at 10:00 am AEST (12:00 am GMT Tuesday).
This opening level was based on the June share price futures contract of the benchmark, last trading just 13 points above the previous settlement at 8,775 points at the time of writing.
The main U.S. stock indexes recovered from large falls after Pakistan's Prime Minister Shehbaz Sharif said Middle East peace talks were progressing steadily, asked Trump to extend his deadline for two weeks, and asked Iran to open the Strait as a goodwill gesture.
The S&P 500 and the Nasdaq Composite indexes reversed their losses just before the close to finish slightly higher as markets “sniffed out a deal”, said CommSec Equity Market Strategist James Gruber.
The Dow Jones Industrial Average slipped 0.2% while the S&P 500 and Nasdaq Composite each added 0.1%.
Keator Group managing partner Matthew Keator said investors were trying to interpret Trump’s statements and assess if he would follow through with his ultimatum to escalate military action against Iran.
"How much of it is posturing, and how much of it is telegraphing what he will actually do?" Keator was quoted in a Reuters story as saying.
"Investors need to make sure that they make whatever necessary adjustments for their personal circumstances.”
Gruber said Trump had since claimed a peace deal had been reached if the Strait was opened but whether that would happen was the “big question”.
“What’s going to happen? Who knows,” he said.
Companies trading ex-dividend today include Clime Capital (ASX: CAM) and Myer (ASX: MYR).
The Australian sharemarket had finished higher on Tuesday in advance of the deadline with the ASX 200 adding 1.74% to 8,728.8 points as all 11 sectors rose.
In fixed interest markets, yields on Australian Government bonds fell with two year rates sliding 1.69% to 4.582% and 10 year rates diving 1.03% to 4.897% at the time of writing
