Australian shares opened higher on Monday as oil prices edged up following fresh attacks in the Middle East, raising concerns that escalating hostilities could threaten crude supplies through the Strait of Hormuz.
The S&P/ASX 200 gained 26.1 points, or 0.3 per cent, to 8,742.7 in early trading. The Australian dollar was changing hands at US69.78 cents.
Brent crude was close to US$105 a barrel, while West Texas Intermediate stood at about US$92. King Khalid International Airport in Riyadh was attacked overnight by Iran-backed Houthi militants, a day after a strike that killed 12 people.
Major Middle Eastern oil producers have restored crude exports through the Strait of Hormuz to levels close to those seen before the conflict. However, the increase in tanker attacks and heightened regional tensions has renewed concerns over the security of those flows.
Wall Street ends week higher
US stocks finished a positive week with further gains on Friday. The S&P 500 rose 0.6 per cent, its first advance since reaching a record high three days earlier.
The Dow Jones Industrial Average added 423.31 points, or 0.8 per cent, to 51,654.95, while the Nasdaq composite climbed 0.6 per cent, or 172.83 points, to 27,366.17. The S&P 500 gained 46.18 points to close at 7,811.54.
Bond markets remained volatile, with the yield on the benchmark 10-year US Treasury note ending at 5.24 per cent, up from 5.22 per cent late on Thursday. It recently reached its highest level since 2002 amid concerns over inflation, the US government’s debt burden and continued economic growth.
Higher yields increase borrowing costs and can weigh on economic activity, while also making investors less willing to pay elevated prices for shares and other assets. Strong demand at recent Treasury auctions has helped limit further rises in yields.
Humana was among the strongest performers on Wall Street, rising 11.6 per cent after the insurer reported encouraging data on its quality ratings compared with rivals in Medicare Advantage plans.
Shares in Crown Castle and American Tower rose 15.6 per cent and 9.3 per cent respectively after SpaceX announced a purchase of low-band spectrum intended to support its Starlink Mobile business. SpaceX said the spectrum could help its signal penetrate buildings, although the transaction still requires regulatory approval.
The prospect of a new competitor sent shares in wireless operators lower, with T-Mobile US falling 13.3 per cent, AT&T dropping 9.8 per cent and Verizon declining 8.7 per cent.
President Donald Trump said on Sunday that Russia and Ukraine had agreed to an “energy ceasefire” with immediate effect. “Both parties have agreed. Do not break it!” he wrote on his Truth Social platform, without providing further details.
Investors are now awaiting results from major US banks, including Citigroup, JPMorgan Chase and Wells Fargo, which are due to report on Tuesday. Expectations for corporate profits remain high even as US consumers report growing pressure from inflation.
