Australia’s share market has started the week lower after a planned second round of US-Iran peace talks fell apart and as closure of a key energy transport route continues to wreak havoc.
The S&P/ASX200 slipped 23 points lower by midday, down 0.26 per cent, to 8,763.5, as the broader All Ordinaries fell 15.1 points, or 0.17 per cent, to 8,993.6.
The Persian Gulf conflict continued to simmer with the Strait of Hormuz – an arterial route for a a fifth of global oil and gas supplies – entering a ninth week of effective closure.
“The markets clearly remain hopeful that the ceasefire will hold if talks stagnate, hostilities will not renew, and a peace deal will eventually materialise,” Capital.com senior market analyst Kyle Rodda said.
“However, that outcome is not without its risks and potential costs, with the Strait of Hormuz still closed and the global economy still drifting towards a supply cliff in energy markets.”
Beside the headline risk presented by geopolitics, market volatility could also be fueled this week by central bank decisions, US company earnings, and macroeconomic data and events, including local inflation figures for March.
Basic materials was one of only two sectors in the green on Monday, up 0.6 per cent as advances from mega miners Rio Tinto and Fortescue helped ballast a modest dip in BHP.
Gold miners were mixed but skewing positive, as the precious metal hovered just above $US4,700 ($A6,557) an ounce.
Battery minerals producers performed well, with PLS and Liontown each up more than three per cent after BMI upgraded its lithium price forecast on Friday.
Financials dropped 0.7 per cent, with Commonwealth Bank leading the big four lower with a 1.2 per cent decline to $172.46.
Energy stocks also fell despite oil prices inching higher since Friday, with the Brent benchmark trading near $US100 a barrel.
Woodside and Santos each shed roughly 1.3 per cent, while coal producers and uranium stocks also sold off.
Utilities were also under pressure, slumping as Origin tumbled 2.6 per cent to $12.44 after it sharply downgraded earnings guidance for UK energy provider Octopus Energy, in which it owns a stake of about 23 per cent.
Consumer staples ran into profit-taking after a strong week prior, down 0.9 per cent on Monday and tracking with similar dips in Coles and Woolworths.
Consumer cyclicals edged 0.1 per cent higher with help from Aristocrat Leisure and Eagers Automotive, as Wesfarmers and JB Hi-Fi lost ground.
Toll road operator Atlas Arteria outperformed the top-200 with a more than 14 per cent boost after receiving a takeover bid from IFM Investors.
The Australian dollar is buying 71.68 US cents, up from 71.23 US cents on Friday at 5pm.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
