Oil and gas lifts local market on Monday

Energy stocks carried the Australian sharemarket on their back on Monday, enabling a sixth consecutive rising, as escalating tensions in the Middle East fed into a rally in oil prices and producers.

The S&P/ASX 200 closed up 23 points, or 0.3 per cent, to 7578.4, around 50 points shy of its all-time high reached in August 2021. The broader All Ordinaries gained 23.1 points, also 0.3 per cent, to 7,808.3.

Th energy sub-index was the driver, firming 1.8 per cent, with potential disruptions to oil supply worsening as oil tankers linked to the US and UK. On the back of resultant higher prices, Woodside Energy advanced 73 cents, or 2.3 per cent, to $31.91; its putative merger partner Santos was up 13 cents, or 1.7 per cent, to $7.80; Beach Energy put on 3 cents, or 1.9 per cent, to $1.625; and Brazilian-based producer Karoon Energy gained 5 cents, or 2.6 per cent, to $1.955.

In big mining, BHP surrendered 67 cents, or 1.4 per cent, to $46.87, after a Brazilian federal judge ruled on the weekend that the company should pay part of a 47.6 billion reals ($14.7 billion) fine relating to the deadly tailings dam disaster in 2015. BHP has set aside $US3.7 billion ($5.6 billion) to pay for damages, but said it had not been informed of the latest ruling. Fellow bulk-mining behemoth Rio Tinto dropped 81 cents, or 0.6 per cent, to $131.82, while iron ore heavyweight Fortescue added 28 cents, or 1 per cent, to $29.25.

In gold, the sector was led lower by Gold Road Resources, which was slammed 31.5 cents, or 18.4 per cent, lower to $1.395 after reporting weaker gold production and downgrading its full-year guidance, in its latest quarterly report. De Grey Mining eased 3 cents, or 2.5 per cent, to $1.17; Regis Resources lost 5 cents, or 2.3 per cent, to $2.11; and Perseus Mining slid 4.5 cents, or 2.4 per cent, to $1.82. But Northern Star Resources was up 5 cents, or 0.4 per cent, to $12.95; Bellevue Gold managed a 7-cent rise, up 5.4 per cent to $1.365; and Capricorn Metals gained 5 cents, or 1.1 per cent, to $4.56.

In coal, Whitehaven Coal strengthened 23 cents, or 2.8 per cent, to $8.37; New Hope Corporation added 4 cents, or 0.8 per cent, to $5.33; Stanmore Resources rose 6 cents, or 1.6 per cent, to $3.91; Coronado Global Resources firmed 4 cents, or 2.5 per cent, to $1.66; and Yancoal Australia gained 10 cents, or 1.7 per cent, to $5.92.

Uranium mine comes out of mothballs

Amid the uranium players, Boss Energy slipped 25 cents, or 4.5 per cents, to $5.33, after being downgraded to ‘hold’ by broking firm Bell Potter; Deep Yellow lost 5.5 cents, or 3.9 per cent, to $1.34; NexGen Energy walked back 12 cents, or 1.1 per cent, to $11.30; and Peninsula Energy gave up half a cent, or 4.4 per cent, to 11 cents. Paladin Energy was unchanged at $1.23 despite resuming production at the Langer Heinrich Uranium mine in Namibia, after the operation was put into ‘care and maintenance’ six years ago due to weak uranium prices. First ore has been fed into the mine’s processing plant, with the full restart of operations 93 per complete. The company aims to achieve commercial production by the end of the current quarter.

In lithium, producer Arcadium Lithium sank 53 cents, or 6.5 per cent, to $7.67, but fellow producer Pilbara Minerals appreciated 7 cents, or 2 per cent, to $3.60; but Mineral Resources, which produces iron ore and lithium, gained 45 cents, or 0.8 per cent, to $59.84; and IGO, which mines nickel as well as lithium, lifted 13 cents, or 1.7 per cent, to $7.60 after agreeing with its joint venture partner on an updated lithium pricing arrangement. Some of the lithium project developers managed to put a positive foot forward, with Liontown Resources rising 3.5 cents, or 3.8 per cent, to 95.5 cents; and Core Lithium gaining half a cent, or 2.7 per cent, to 19 cents.

On planet Big Bank, Westpac firmed 23 cents, or 1 per cent, to $23.93; ANZ gained 18 cents, or 0.7 per cent, to $26.85; Commonwealth Bank rose $1.06, or 0.9 per cent, to $115.92; and National Australia Bank was up 35 cents, or 1.1 per cent, to $32.14.  

Biotech heavyweight CSL strengthened 26 cents to $293.26.

After plunging more than 30% on Thursday after rescinding its existing earnings guidance due to weak performance in Japan – its fourth profit downgrade in three years – Domino’s Pizza managed a 42-cent gain, up 1.1 per cent to $39.93.

Auto parts retailer Bapcor said it expected its half-year revenue to increase 2 per cent year-on-year in its upcoming report. The shares rose 31 cents, or 5.9 per cent, to $5.58 and were the best performer of the S&P/ASX 200.

Fresh record highs on Wall Street In the US, the broad S&P 500 and the 30-stock Dow Jones Industrial Average both notched fresh record highs, as Wall Street looked toward several mega-cap tech earnings reports and the Federal Reserve’s rate policy decision. 

The benchmark S&P 500 rose 36.96 points, or 0.8 per cent, to 4,927.93, while the Dow Jones added 224.02 points, or 0.6 per cent, to close at 38,333.45. The tech-heavy Nasdaq Composite Index gained 172.68 points, or 1.1 per cent, to settle at 15,628.04.It was the sixth record close for the S&P 500 and the Dow.

The Federal Open Market Committee will begin its two-day policy meeting on Tuesday. Investors appear almost certain the central bank will keep rates steady. 

On the bond market, the US 10-year bond yield eased 6 basis points, to 4.083 per cent, while the 2-year yield receded 1.2 basis points, to 4.324 per cent.

Gold gained US$10.03, or 0.5 per cent, to US$2,031 an ounce. The global benchmark Brent crude oil grade shed US$1.02, or 1.2 per cent, to US$82.53 a barrel, and US West Texas Intermediate oil slid US$1.06, or 1.4 per cent, to US$76.95.

The Australian dollar is buying 66.11 US cents this morning, up from 65.9 cents at the ASX close on Monday.

James Dunn

James is an experienced senior journalist and host of The Inside Network's industry events.