ASX slides lower as oil, bonds weigh on Wall Street

Australia’s sharemarket has started the week in a holding pattern, as interest rate concerns, soaring bond yields and stubborn oil prices keep investors on the back foot.

The benchmark S&P/ASX200 index fell 0.8 points by midday on Monday, to be down 0.01 per cent to 8,730.4, as the broader All Ordinaries lost 1.9 points, or 0.02 per cent, to 8,920.8.

Interest rates were coming sharply into focus ahead of pivotal Australian employment figures later this week, along with the Reserve Bank’s September board meeting in a week’s time, Moomoo chief market strategist Tapas Strickland said.

Central bank governor Michele Bullock firmly retired the bank’s “narrow path” rhetoric last week, noting that high inflation and its economic impacts had to be tamed.

“For investors, the key question is whether the bank is willing to generate a greater slowing in the economy to tackle inflation,” Strickland said.

Financial markets are pricing in a 87.9 per cent chance of a rate hike next week, with another rise fully priced in for early 2027, as ANZ economists ratcheted up their expectations to two hikes after the next two meetings.

Meanwhile, oil prices have eased to the lowest level in more than 10 days after Saudi crude exports proved resilient despite recent attacks, and as the Middle East conflict’s central US-Iran stalemate drags on.

Woodside dipped 1.7 per cent to $31.89, while Santos edged higher and refinery operators Viva and Ampol traded lower.

The basic materials sector lost ground with some sluggish performances from BHP and Rio Tinto, despite copper prices swinging higher since Thursday.

Gold miners were mixed despite the precious metal firming to $US4,376 (A6,142), while Ramelius Resources was a stand-out, charging more than seven per cent higher after boosting its four-year production guidance.

The heavyweight financials sector crept less than 0.2 per cent higher, as ANZ and NAB improved while Commonwealth Bank and Westpac were broadly flat.

Consumer-facing stocks were also little changed, with the discretionary sector up 0.1 per cent and staples swinging by the same in the other direction.

In company news, Telix Pharmaceuticals shares tumbled after revealing plans to buy German isotope producer ITM in a deal worth $3.3 billion.

The corporate watchdog has launched legal action against former Super Retail Group boss Anthony Heraghty, alleging he misled the company board and the market over an undisclosed relationship.

Bourse operator ASX Ltd has appointed Dexus’ chief financial officer Keir Barnes to become its finance chief, taking over from the retiring Andrew Tobin.

Investment firm Perpetual Ltd tumbled more than 13 per cent after it rejected another takeover bid from Swedish private equity giant EQT, the sweetened $2.6 billion still not enough for Perpetual’s board.

The Australian dollar was buying 71.24 US cents, down from 71.27 on Friday at 5pm.

AAP

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