ASX rises ahead of RBA rate call as oil stocks rally; SGH, Life360 plunge

The Australian sharemarket edged higher in early trade as energy stocks rallied due the latest jump in oil prices amid the US-Iranian stalemate over the Strait of Hormuz, as investors awaited the interest rate decision by the Reserve Bank this afternoon.

The S&P/ASX 200 was up 19.4 points, or 0.2 per cent, to 9252 shortly after 11am AEST, with energy stocks leading the gains, while seven of its 11 industry sectors were in the red. The local bourse slid 0.3 per cent on Monday. The Australian dollar was trading at US70.58¢.

The Reserve Bank announces its interest rates decision at 2.30pm AEST, with money markets and economists in near-unanimous agreement that the central bank’s monetary policy board will hold the cash rate steady at 4.35 per cent when it wraps up its latest two-day meeting.

Reporting season is starting to heat up, with Southern Cross Media Group and Life360 both having reported results before the start of trading.

Southern Cross Media, the business created from the merger of Kerry Stokes’ Seven West and radio group Southern Cross, dropped 1.8 per cent after announcing a $13 million loss for the 2025 financial year due to deteriorating market conditions. The group, which owns the Seven Network, The West Australian newspaper and Triple M network, said revenue dropped across television, newspapers and radio. Kerry Stokes’ SGH, which owns 20.1 per cent of Southern Cross Media, slumped 8.3 per cent after saying its net profit stalled at $920 million.

Family tracking app maker Life360 weighed the tech sector down as it plummeted 13.8 per cent. While its revenues in the June quarter jumped 38 per cent to $US159 million ($225.4 million), its operating expenses grew by 43 per cent, helping push quarterly net profit down to $US5.1 million, from $US7 million a year ago. The fall overshadowed gains by software makers WiseTech Global (up 0.8 per cent) and Xero (up 1.3 per cent).

Meanwhile, oil and gas giants Woodside and Santos jumped 3 per cent and 4.1 per cent, respectively, as oil prices climbed again overnight amid dimming hopes for a breakthrough in the standoff between the United States and Iran over the Strait of Hormuz, the narrow waterway between Iran and Oman that normally carries as much as one-fifth of the world’s oil supply.

The price of Brent crude, the global benchmark for oil, climbed nearly 5 per cent to about $US88 a barrel, trading 16 per cent higher now than before the start of the war. West Texas Intermediate crude, the US benchmark, also moved higher by 5 per cent, to $82 a barrel.

Iran and Oman recently indicated that they were near an agreement that would allow oil and other important commercial traffic to resume through the crucial waterway. But Iran has issued a long list of demands that it said would have to be met by the US before ships could move freely again, including reparations payments for the war. US President Donald Trump in turn demanded compensation from Iran for all the people they have killed in conflicts after Tehran.

Trump said in a social media post that he will put the new demands “firmly into any, and all, future negotiations.” The hardening stance makes it unlikely that Tehran and Washington will be able to agree to any immediate pact to end the war and ease the strain on global energy supplies.

The ongoing uncertainty also benefited local refiners Ampol and Viva Energy, which gained 2.1 per cent and 2.5 per cent, while coal producers Yancoal and Whitehaven rose 2.8 per cent and 3.1 per cent, respectively, amid bets the oil crunch will bolster demand for their fossil fuel.

Mining stocks were also higher in early trade, with BHP up 1.3 per cent, Rio Tinto up 0.5 per cent and Fortescue up 1.1 per cent. Gold miners Northern Star added 0.9 per cent and Evolution Mining gained 2 per cent as bullion prices rose to nearly $US4400 an ounce.

On the flipside, shares of companies with high fuel dependency such as airlines declined. Qantas fell 2.4 per cent, and Virgin Australia lost 1.4 per cent.

Financial stocks, which account for about a third of the entire ASX, were also lower. CBA, Australia’s biggest lender, was down 0.2 per cent, Westpac shed 0.8 per cent, National Australia Bank was down 0.4 per cent and ANZ slipped 0.7 per cent.

On Wall Street overnight, the US stock market edged down from its all-time high on Monday amid the ongoing uncertainty over the Strait of Hormuz.

The S&P 500 slipped 0.1 per cent from its record set on Friday. The Dow Jones Industrial Average dipped 0.1 per cent and the Nasdaq composite fell 0.3 per cent.

Momentum slowed for Wall Street stocks following a rally powered by soaring profits for big US companies. Reports are on track to show earnings per share leaped 50 per cent in the spring from a year earlier for companies in the S&P 500, according to FactSet. That would be the best growth since five years ago, when the economy was roaring out of the chasm created by COVID.

Berkshire Hathaway was one of the latest companies to deliver a stronger profit for the last quarter than analysts expected, and the company built by legendary investor Warren Buffett said over the weekend that it’s also invested some of its massive pile of cash into stocks under its new CEO, Greg Abel.

Berkshire Hathaway has been famous for buying stocks at what it considers low prices, and criticism has been high that US stocks generally look too expensive. But when they report strong profits, it helps them look less pricey. Berkshire Hathaway’s stock rose 1.5 per cent.

MarineMax jumped 46.1 per cent after the retailer, marina operator and superyacht services provider said it agreed to sell itself for about $US1.5 billion in cash to a portfolio company of Blackstone.

But Intel helped offset such gains and fell 4.1 per cent after saying it may sell $US15 billion of its stock. Such a move would dilute the ownership stakes of shareholders, and Intel said it would likely use the cash for investments to take advantage of the huge spending underway on artificial-intelligence technology.

Higher oil prices push inflation upward, and the main event for Wall Street this week will likely be Wednesday’s update on how bad inflation was last month. Economists expect it to show inflation slowed to 3.4 per cent from 3.5 per cent in June. A slowdown would mean less pressure on the Federal Reserve to raise interest rates.

Higher rates would help keep a lid on inflation, but they would also slow the economy by making it more expensive for US households and companies to borrow money. They would also undercut prices for stocks and other investments.

A report on Friday showing unexpectedly weak hiring across the US lowered Wall Street’s expectations for an upcoming rate hike. But traders still see a nearly 52 per cent chance the Fed will raise its main interest rate at its next meeting in September, according to data from CME Group.

with AP, Bloomberg

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