Australian shares have edged higher, bolstered by energy stocks and the rise in oil prices, despite global stock markets stumbling.
Key points:
- The benchmark had a volatile opening
- The Dow closed lower after disappointing bank results
- Brent crude futures rallied to a three-year high
The ASX 200 was up 0.2 per cent to 7,408, by 11:21am AEDT, with energy stocks leading the way.
Eight of 11 sectors were higher along with the S&P/ASX 200 Index.
Energy and consumer discretionary are the best performing sectors, gaining 1.2 per cent and 1.2 per cent respectively.
Novonix (+9.8pc), Adbri (+7.2pc) and Pendal Group (+4.7pc) were among the biggest gainers.
Brent crude oil was up, trading at $US86.53 a barrel, by 11:21am AEDT. It has risen 25 per cent since the start of December.
ANZ Research analysts said this is backed up by signs in the physical market.
“Physical barrels of oil are changing hands at near-record-high premiums, while the strong outlook is reflected by the market’s bullish backwardated prices structure where near-term futures are higher than longer-dated ones,” Brian Martin and Daniel Hynes said in a note.
“Strong global demand has helped ease concerns about China, where a zero-COVID strategy has seen increased restrictions put in place. This comes after China reported relatively weak imports of crude oil in December.”
The Australian dollar was up at 72.09 US cents by 11:39am AEDT.
Global shares tumble
On Wall Street, the Dow Jones closed lower on Friday with a big drag from financial stocks as investors were disappointed by fourth-quarter results from big US banks, which cast a shadow over the earnings season kick-off.
The Dow Jones Industrial Average fell 201.81 points, or 0.56 per cent, to 35,911.81.
However, the S&P 500 gained 3.82 points, or 0.08 per cent, to 4,662.85 and the Nasdaq Composite added 86.94 points, or 0.59 per cent, to 14,893.75.
“We are now entering a period where the Federal Reserve will engage in a never-before-seen experiment: raising interest rates off zero and reducing the size of its balance sheet in the same year,” said Nicholas Colas, co-founder of DataTrek Research.
“The market is still left wondering what results will come from their decisions.”
Meanwhile, the consumer discretionary stocks put pressure on the indexes throughout the session after morning data showed a December decline in retail sales and a souring of consumer sentiment.
The S&P 500 bank sub-sector, which hit an intraday high in the previous session, closed down 1.7 per cent.
The sector has been outperforming the S&P recently as investors bet the Federal Reserve’s expected interest rate hikes will boost bank profits.
US stock markets will remain shut on Monday for the public holiday in honour of Martin Luther King Jr.
Meanwhile, the pan-European STOXX 600 shed 1.0 per cent, while also marking its worst week since late November.
ABC/Reuters
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