ASX to rise as oil slides on US, Iran deal speculation
CNN founder Ted Turner has died at 87.
Australian stocks are poised to rally and the kiwi dollar extended yesterday’s gains as investors’ appetite for risk was revived on optimism the US and Iran were nearing a deal as President Donald Trump said there was a good chance of the war ending.
Oil prices fell to a two-week low, spurring gains for carriers such as American Airlines and United Airlines and setting a strong lead for the likes of Air New Zealand and Qantas Airways in the trans-Tasman markets.
Semiconductor and chip stocks drove the Nasdaq Composite and S&P 500 to new highs, with Advanced Micro Devices surging 17% on strong earnings as the mood for the artificial intelligence trade remained upbeat, following Infratil’s surge on the NZX yesterday as the local infrastructure investor’s CDC unit secured a transformational contract.
Local media companies such as NZME and Sky Network Television will be in focus today after strong earnings from Walt Disney Co and the New York Times, with Warner Bros Discovery poised to report after the bell, and as the industry reflects on the death of CNN founder Ted Turner at the age of 87.
Risk on
Australian futures are pointing to a 1.1% gain for the S&P/ASX 200 index when trading opens across the Tasman as investors cheered reports that Iran was reviewing a peace proposal from the US to end the two-month long conflict in the Middle East.
Brent crude oil futures dropped 8.7% to US$101.19 a barrel and the volatility index – known as Wall Street’s fear gauge – slipped 1.4% to 17.13. Polymarket traders on the prediction market have priced in a 29% chance of a lasting peace by the end of May and a 44% chance by the end of June.
“The US has offered Iran a one-page memorandum of understanding to end the war, reopen the Strait of Hormuz and lift the US blockade on Iranian ports, with nuclear talks to follow,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The proposal surfaced hours after President Trump said he had paused the military mission escorting commercial ships through Hormuz.”
Stocks on Wall Street and in Europe rallied, with airlines – hit by surging jet fuel prices – among those to gain.
The UK’s FTSE up 2.2%, Germany’s DAX gained 2.1% and France’s CAC 40 advanced 2.9%, with aircraft and engine makers MTU Aero Engines, Airbus and Safran and budget carrier EasyJet among the bigger gainers.
Booming AI
Semiconductor and chip firms surged on Wall Street, with AMD among those leading the charge after its strong March quarter and Nvidia gaining 5.5% as the tech-heavy Nasdaq Composite climbed 1.8% in late trading, while the S&P 500 and Dow Jones Industrial Average were both up 1.3%.
The AI trade continued to be in vogue in Asia yesterday with Samsung Electronics and chipmaker SK Hynix helping propel South Korea’s Kospi to new highs on Wednesday and New Zealand’s Infratil marking its biggest one-day gain since December 2020 as it led gains on the S&P/NZX 50 index and ASX200.
Walt Disney led the Dow higher, climbing 7.5% in late trading as new CEO Josh D’Amaro outlined his vision for the company, while the New York Times jumped 9.5% as it beat estimates with strong digital subscriber growth. Warner Bros Discovery is due to report after the bell.
Meanwhile, media moguls marked the death of Ted Turner, who founded the CNN network now owned by WBD and shaped cable television through the end of the 20th century.
The kiwi dollar traded at 59.57 US cents at 7am in Auckland from 59.46 cents yesterday, and rose to 82.31 Australian cents from 82.04 cents, with no major local data scheduled for today.
The Reserve Bank governor Anna Breman and acting assistant governor Angus McGregor will appear before Parliament’s finance and expenditure select committee to discuss its financial stability report.
