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Highlights
- ASX slips amid rising oil and global tech tremors
- Geopolitical heat spurs crude surge, pressures sentiment
- Small caps spotlight resource and takeover updates
The Australian share market is facing a cautious start to the week, with the ASX 200 expected to edge lower following a volatile session on Wall Street and escalating geopolitical tensions in the Middle East. Futures for the benchmark index were down 20 points or 0.23% early Tuesday, as energy markets reacted sharply to reports of US-led strikes on Iranian nuclear sites.
Geopolitical Volatility Spurs Crude Gains
Brent crude surged by as much as 4% at the open, briefly breaching the US$80 per barrel mark before settling near US$77. The spike came after military action raised fears of wider instability in the region, particularly over the potential closure of the Strait of Hormuz—a critical channel for global oil supply. Market analysts flagged the possibility of oil moving toward the US$90–US$120 range if tensions intensify.
The broader market saw a move into haven assets, with the US dollar strengthening and bond yields dipping. The US 10-year Treasury yield fell two basis points to 4.38%, and gold held firm at around US$3,368/oz.
Wall Street Stumbles on Chip and Regulatory Concerns
Global equity markets were already under pressure ahead of the weekend. The S&P 500 fell 0.22%, while the Nasdaq dropped 0.51% on renewed tech sector headwinds. Notably, semiconductor firms faced heavy selling as the US government considered tightening tech waivers in China. Nvidia (NASDAQ:NVDA) declined 1.1%, and Applied Materials (NASDAQ:AMAT) shed nearly 2%. Alphabet (NASDAQ:GOOGL) was hit harder, losing 3.5% amid deepening regulatory scrutiny in Europe and Turkey.
ASX Eyes Third Consecutive Decline
Locally, the ASX300 may see continued softness as oil-sensitive sectors and offshore sentiment influence market direction. Recent news includes strategic updates and takeover developments. AMP (ASX:AMP) is reportedly mulling a structural overhaul, potentially spinning off its banking division. Meanwhile, Santos (ASX:STO) remains in focus with South Australian authorities advocating for regional investment assurances amid acquisition talks.
Other M&A headlines saw SmartPay (ASX:SMP) accept a NZ$1.20-per-share acquisition offer from Shift4 Payments, while Spark New Zealand (ASX:SPK) sold its 10% stake in Hutchison Telecommunications for NZ$47 million.
Small Caps in the Spotlight
Investor attention in the small-caps space turned toward resource juniors. D3 Energy (ASX:D3E) announced a 35% improvement in gas flow from its RBD03 well in South Africa. FireFly Metals (ASX:FFM) completed a A$70 million equity raising involving a Canadian placement. Patronus Resources (ASX:PTN) revealed a maiden exploration target of up to 500,000 ounces at its Merlin project in Western Australia, while Solis Minerals (ASX:SLM) reported promising copper and gold hits from early drilling in Peru.
As the local bourse navigates through this geopolitical and macroeconomic fog, investors are keeping a close watch on evolving global cues, commodity trends, and updates from within the ASX300 space.
