The Australian sharemarket was set to open higher on Tuesday, with futures at 4.19am AEST pointing to a gain of 20 points, or 0.2 per cent. That followed a 0.4 per cent rise on Monday, as investors took their cue from a global rally that pushed stocks to record highs and sent oil sharply lower.
WTI crude fell more than 6 per cent to around $US90 a barrel after officials signalled the United States was nearing a deal with Iran to reopen the Strait of Hormuz and restore oil flows. The shift lifted risk appetite across markets, with the MSCI All Country World Index rising 0.5 per cent to an all-time high close and Europe’s Stoxx 600 advancing for a sixth straight session to its highest level since the outbreak of the Iran war.
Donald Trump said on Monday that negotiations with Iran were “proceeding nicely,” while an Iranian delegation travelled to Doha for consultations with senior Qatari officials on the talks, including discussions on the release of frozen Iranian funds. The comments and the trip added to hopes that weeks of stalemate between Washington and Tehran may be easing, after several earlier attempts to strike a deal failed to break the deadlock.
The move in global equities also reflected renewed enthusiasm for the artificial intelligence trade, even as the market had been under pressure from elevated oil prices and higher inflation that pushed bond yields to multi-year highs. Futures on the S&P 500 climbed 1 per cent and Nasdaq 100 contracts rose 1.4 per cent, while the Australian dollar strengthened to US71.75¢ as the US dollar retreated against all of its Group-of-10 peers.
For Australian investors, the immediate question is whether the relief in energy markets can hold long enough to support share prices after a volatile stretch shaped by the conflict in the Middle East. If it does, asx today may be driven less by fear of disruption and more by the prospect that global markets have found room to breathe again.
