ASX up 0.2% as oil prices stabilise

Market Reports

by Peter Milios

Oil prices remained stable, hovering around $83 per barrel, after an initial surge linked to Hamas' attacks on Israel over the weekend. This surge was reversed following a report suggesting Iran's surprise at these attacks, potentially reducing the chances of additional sanctions on Iranian oil and limiting Iran's involvement in the conflict in the Middle East.

The American Petroleum Institute reported a significant increase in oil stockpiles, but Cushing, Oklahoma's inventory (the delivery point for WTI) was expected to resume declining. Official data and monthly oil market reports from OPEC and the International Energy Agency were awaited.

Oil prices were influenced by Saudi Arabia's support for stabilising oil markets, high U.S. production, and the possibility of a U.S.-Venezuela deal. Despite fluctuations, oil prices remained slightly higher for the year, driven by Saudi Arabia and Russia's production cuts in the last quarter.

The S&P/ASX 200 is 0.2 per cent higher at 7,102.80.

The SPI futures are pointing to a rise of 19 points.

Best and worst performers

The best-performing sector is Information Technology, up 1.23 per cent. The worst-performing sector is Health Care, down 2.52 per cent.

The best-performing large cap is Insurance Australia Group (ASX:IAG), trading 2.89 per cent higher at $5.69. It is followed by shares in James Hardie Industries plc (ASX:JHX) and SEEK (ASX:SEK).

The worst-performing large cap is ResMed (ASX:RMD), trading 5.47 per cent lower at $22.12. It is followed by shares in CSL (ASX:CSL) and BlueScope Steel (ASX:BSL).

Asian news

Asia-Pacific markets rose as investors looked ahead to key U.S. consumer inflation data, which will inform the Federal Reserve’s rate decision in its policy meeting beginning Oct. 31.

In Australia, the S&P/ASX 200 added 0.31%.

In Japan, the Nikkei 225 opened 1% higher, with shares of Uniqlo-owner Fast Retailing up nearly 1% ahead of its full-year earnings report due later in the day.

South Korea’s Kospi rose 0.75% at the opening bell, holding near two-week highs.

Hong Kong’s Hang Seng index look set to climb with futures at 18,137 compared with the HSI’s close of 17,893.1.

Overnight in the U.S., all three major indexes closed in the green. The Dow Jones Industrial Average climbed 0.19%, or 65.57 points, to close at 33,804.87. The S&P 500 gained 0.43%, ending at 4,376.95. The Nasdaq Composite added 0.71% to close at 13,659.68.

Economists surveyed by Dow Jones are forecasting a 0.3% month-over-month increase for the upcoming U.S. inflation data, and a 3.6% rise from the prior year.

Company news

Liontown Resources (ASX:LTR) has granted Albemarle a seven-day extension for due diligence as Albemarle's $6.6 billion takeover bid faces fading prospects of success. The emergence of a potential blocking stake by Gina Rinehart has diminished the chances of Albemarle proceeding with a binding bid, causing Liontown's shares to fall below Albemarle's $3-a-share offer price.Share are trading 1.37 per cent lower at $2.88.

Wildcat Resources (ASX:WC8) announced that further high grade lithium assays have been discovered at their Tabba Tabba, south of Port Hedland, WA. In response, Wildcat Managing Director Samuel Ekins said, “The system is showing it has significant scale, we are seeing impressive intersections at multiple locations and the central pegmatite cluster seems to be getting better with depth.” Shares are trading 17.05 per cent lower at 36.5 cents.

Sunstone Metals Ltd (ASX:STM) announced further high-grade gold-silver assays from the Limon epithermal discovery in southern Ecuador. In response, Sunstone Managing Director Malcolm Norris, “Limon is a significant discovery and it continues to grow with every round of drilling and assays. There is now abundant evidence to demonstrate that the orebody has every potential to support a starter pit opportunity for the large-tonnage Bramaderos porphyry development.” Shares are trading flat at 1.5 cents.

Commodities and the dollar

Gold is trading at US$1888.00 an ounce.

Iron ore is 1.9 per cent higher at US$116.25 a tonne.

Iron ore futures are pointing to a 0.97 per cent rise.

One Australian dollar is buying 64.17 US cents.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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