Energy and Financial Stocks Weigh Down ASX200 as Global Oil Prices Slide

May 05, 2025 01:33 PM AEST | By Team Kalkine Media

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Energy and Financial Stocks Weigh Down ASX200 as Global Oil Prices Slide — Image source: Shutterstock

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Highlights

ASX200 dips amid energy and bank sector weakness

Oil price plunge impacts major Australian energy players

Financials under pressure following earnings and cost concerns

The ASX200 saw a notable dip during early afternoon trade, down by 0.74% at 12:22pm AEST, as weakness in energy and financial sectors dragged the broader index lower. Nine out of eleven sectors were trading in the red, signaling broad market pressure.

The energy sector recorded the sharpest decline, falling 2.45% following a significant drop in global oil prices. Crude oil sank 3.84% to US$56.05 per barrel (A$86.70), while Brent crude fell 3.49% to US$59.15. The slump came in response to an agreement among eight OPEC+ nations to raise production by 411,000 barrels per day in June, further boosting global supply and intensifying downward pressure on prices.

Major Australian energy stocks mirrored the global trend. Shares of Woodside Energy (ASX:WDS) fell 3.06%, Santos (ASX:STO) declined 2.63%, Beach Energy (ASX:BPT) was down 2.92%, and Karoon Energy (ASX:KAR) slipped 1.71%. Yancoal (ASX:YAL) also declined by 1.86%.

Financials were the second hardest-hit sector, adding to the day's downward momentum. The big four banks experienced consistent losses with Westpac (ASX:WBC) leading the fall at 2.66%, followed by Commonwealth Bank (ASX:CBA) down 2.23%, National Australia Bank (ASX:NAB) falling 2.19%, and ANZ Group (ASX:ANZ) edging lower by 0.76%.

The pressure on financial stocks intensified following Westpac's half-year results, which showed a dip in profit. Increased expenses and hedging-related impairments overshadowed gains in lending and deposits. The financial sector performance may prompt investors to reassess potential opportunities within the ASX dividend stocks category, especially amid volatile market conditions.

On the commodity front, analysts cited global macroeconomic risks, including trade tensions, as a major factor impacting demand forecasts. ANZ commodity strategists noted the potential for Brent crude prices to dip further under a worst-case scenario, potentially reaching USD50 per barrel. They also pointed to subdued gas prices due to ongoing concerns about slowing global demand.

As global supply surges and demand uncertainty lingers, sectors heavily tied to commodity prices and interest rate sensitivity are facing notable headwinds. For market watchers tracking the ASX200, the day’s movements highlight how broader macroeconomic developments can rapidly shape local equity trends.

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