ASX 200 Expected to Fall as on Tuesday as Oil Prices Surge and Gold Drops
The ASX 200 is expected to open lower on Tuesday as rising oil prices and renewed Middle East tensions weigh on investor sentiment. Energy stocks including Santos and Beach Energy could benefit after crude prices surged overnight, while gold miners may face pressure following a sharp drop in bullion prices. Mining giants BHP and Rio Tinto also remain in focus after strong gains in U.S. trading supported by higher copper prices. Investors are expected to closely monitor commodity markets and geopolitical developments as volatility across global markets continues to increase.
ASX 200 to open lower Tuesday as oil rises again, gold weakens & Middle East weighs.
Key Highlights
- ASX 200 set to open down 31 points
- Iran reportedly halts peace talks, oil prices rally
- Health, IT consumer discretionary might decline on higher crude prices
- Gold prices fell sharply overnight
- Decent gains for BHP and Rio Tinto in US trade
ASX to Open Weaker on Tuesday
ASX futures indicated the market could open 31 points or 0.35% lower on Tuesday after finishing by almost flat at 8729.4 around noon Monday. Investors will remain wary as geopolitical concerns continue to disrupt global markets.
Despite gains on Wall Street overnight, it was a shakier expected start. The Dow ticked up 0.1%, while technology stocks continued to strengthen the U.S. market with advances on the S&P 500 and Nasdaq of 0.25% and 0.4% respectively.
Oil Rally and Energy Stocks
Beach Energy and Santos Ltd may be two of the stronger Australian energy companies this morning after oil prices jumped overnight.
Reports that Iran had abandoned peace efforts and threatened to shut the Strait of Hormuz pushed West Texas Intermediate (WTI) crude up 5.75 percent to US$92.42 a barrel, as well as Brent crude up 4.6 percent to US$95.29 a barrel. Higher oil prices are also raising concerns about inflation and interest rates around the world.
Gold Stocks Weaken on Mining Strength
The BHP Group and Rio Tinto mining giants saw the U.S. market overnight boost their stocks by more than 2% as copper prices gently gained. The gains helped both companies hit near record highs and may aid the local materials sector on Tuesday.
While traders are shunning safe havens, gold continues to be less than $4,513.9 an ounce, a drop of 1.7% putting pressure on gold miners including Newmont Corporation and Northern Star Resources in the meantime.
FAQs
- What makes oil prices soar at unreasonable levels?
Oil spiked after reports that Iran put an end to peace talks and threatened Hormuz shipping lanes while the sea war between Israel and Iran rumbles on.
- What ASX energy stocks are on the radar?
Stronger crude prices might be good for Beach Energy (SGM) and Santos (STO)
- Why are BHP and Rio Tinto going up?
Both stocks rose as firmer copper prices overnight fed through to the equities.
- Why are gold stocks under pressure?
Gold plunged as inflation and interest rates weakened.
Follow Inspirepreneur Magazine for daily global business news