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Shares marked time as the big miners pared yesterday’s gains and a little of the heat came out of the rally in oil.
The ASX 200 gave up less than a point or 0.1 per cent to hover at 6674 mid-session. A subdued session followed overnight weakness on Wall Street after a drone attack on Saudi oil facilities triggered a record surge in oil prices.
Crude oil came off its overnight peak after US President Donald Trump authorised the release of US reserves, and energy analysts said Saudi Arabia could mitigate production lost to the weekend assault by drawing on existing stockpiles. Brent crude eased 83 cents or 1.2 per cent to $US68.19 a barrel. The global benchmark surged 14.6 per cent overnight – the biggest percentage rise on record – after the world’s largest oil facility was crippled by drone attacks, knocking roughly 5 per cent of global supply offline.
Index heavyweight BHP, which has significant oil interests and rallied 3.15 per cent yesterday, gave back some of those gains after its US and UK-listed stock stalled overnight. The Big Australian dropped 1.5 per cent this morning. Rival Rio Tinto shed 1.7 per cent.
The scale of the overnight rally in crude kept the local energy sector in positive territory. Woodside advanced 1.8 per cent, Santos 1 per cent and Oil Search 0.7 per cent.
Tech stocks also found buyers. Technology One added 3.1 per cent, Nanosonics 2 per cent and Wisetech 1.8 per cent.
The big four banks turned positive as the session wore on. NAB was the pick with a rise of 0.5 per cent.
Consumer confidence will be in the spotlight in coming weeks as prices rise at the petrol pump. In a bad omen for the future, figures released this morning showed the weekly consumer confidence index produced by ANZ-Roy Morgan plunged to a two-year low, falling 3.5 per cent to 112.8. The data was collected over the weekend.
House prices continued to decline last quarter, but by less than economists expected. The House Price Index for the three months to the end of June dropped 0.7 per cent, an improvement on the 3 per cent fall at the start of the year and better than the 1 per cent decline tipped by economists.
The minutes from this month’s Reserve Bank board meeting confirmed that the bank stands ready to lower rates if needed and that members still expect an extended period off low interest rates.
What’s hot today and what’s not:
Hot today: with defence systems under the spotlight following the weekend drone attack on Saudi Arabia, military tech company Electro Optic Systems picked the right time to announce it had been selected as one of two remaining contenders for $1 billion worth of contract work for the Australian Army. The company is in contention to provide turrets for a new armoured vehicle. The shortlisted vehicles will undergo testing and evaluation through next year, with the contract expected to be awarded in 2022. Shares in the company rallied 7 per cent to an all-time high.
Not today:shareholders don’t like to see major investors reduce their holdings, even if it is for good reasons. Shares in Ramsay Health Care fell to a six-month low this morning after a philanthropic foundation in the name of company founder Paul Ramsay sold 22 million shares to institutional investors. The foundation uses its funds to offer support to disadvantaged communities. Shares in the listed company fell 5.2 per cent.
Both China’s Shanghai Composite and Hong Kong’s Hang Seng declined 0.9 per cent. Japan’s Nikkei faded 0.1 per cent. S&P 500 index futures were recently down three points or 0.1 per cent.
Turning to commodity markets, gold futures dropped $4.20 or 0.3 per cent to $US1,507.30 an ounce.
On currency markets, the dollarslipped almost a third of a cent to 68.44 US cents.
