Australian shares are set to give up most of their previous day’s gains when trading reopens on Monday following a lower close on Wall Street, but the emergence of the Iranian crisis in the meantime is likely to drive the market through the day.
A fall of 0.2% in the ASX 200 has been flagged in futures trading on the Australian Securities Exchange (ASX), where the March share price index contract was last quoted 20 points under the prior settlement at 9,150 points at the time of writing.
Stocks in New York finished lower on Friday (Saturday AEDT) after higher-than-forecast inflation figures were published, with financial and technology stocks affected the worst.
The Dow Jones Industrial Average lost 1.1%, the S&P 500 dropped 0.4%, and the Nasdaq Composite shed 0.9%.
The prices of U.S. companies fell by their largest percentages in a year in February due to factors like worries over artificial intelligence (AI) costs and disruption, new tariff concerns and simmering geopolitical tensions.
"To wrap up the month of February, we were reminded there are still some cracks out there," Carson Group Chief Market Strategist Ryan Detrick was quoted as saying in a Reuters article.
The military escalation in the Middle East following the assassination of Iran's Supreme Leader Ali Khamenei over the weekend is expected to boost the energy, materials, and mining sectors as oil and gold prices rise.
But it could be negative for financials, technology and consumer discretionary companies like airlines.
The Australian sharemarket finished at a record closing high for the third successive day on Friday, with the ASX 200 adding 0.3% to 9,198.6 points.
In fixed interest markets, Australian Government bond yields dropped, with two-year rates shedding 0.05% to 4.15% and 10 year rates off by 0.058% at 4.641%.
