Oil prices, energy stocks rally as Israel strikes Hamas in Qatar
Wall Street advances as US jobs revisions keeps rate cut in view.
Brent crude oil futures rose and energy companies such as Chevron, Exxon Mobil, BP and Shell gained as Israel’s hunt for Hamas leaders moved to Qatar with a strike in the Gulf state’s capital, Doha.
Meanwhile, stocks on Wall Street were broadly stronger after revisions by the Bureau of Labor Statistics showed the world’s biggest economy added 911,000 fewer jobs in the March year than previously thought, firming up expectations for the Federal Reserve to cut its key rate this month.
Across the Atlantic, UK-listed miner Anglo American’s US$53 billion merger with Canada’s Teck Resources revived optimism about the future of the London Stock Exchange, which will home the enlarged copper producer.
And locally, retailer Briscoe Group will report its first-half result today, having signalled gross margins are still under pressure even as sales grew.
Rising temperatures
Brent crude oil futures nudged up 0.1% to US$66.77 a barrel after Israel’s air force attacked senior Hamas leaders in Qatar – a key partner of the US in the Middle East. Energy companies were broadly stronger on both sides of the Atlantic, with Chevron advancing 1.4% and Exxon Mobil gaining 1.7% on Wall Street, while London-listed BP was up 1.3% and Shell rose 1%.
“Israel’s airforce carried out a strike on Hamas’s senior political leadership in a residential area of Doha, warning the US in advance, marking an escalating tactic against the group,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Brent crude rose as much as 2% in the aftermath of the attack, but the gain has since moderated to less than 1%, trading around US$66.50 per barrel.”
Meanwhile, stocks on Wall Street continued to rise on growing expectations the Federal Reserve will cut the federal funds rate later this month after the Bureau of Labor Statistics revised down jobs growth in the world’s biggest economy by 911,000 in the 12 months ended March 31.
BNZ’s Wong said investors are now focused on upcoming US producer and consumer inflation figures.
The kiwi dollar fell to 59.25 US cents at 7am in Auckland from 59.50 cents yesterday.
The Dow Jones Industrial Average was up 0.5% in late trading, with UnitedHealth Group leading the blue-chip index higher as it gained 8.1% after saying it expects 78% of its Medicare Advantage members to be in top-rated Medicare plans next year.
Mining friends
Across the Atlantic, stock markets were mixed as the UK’s FTSE 100 nudged up 0.2% with mining and energy companies pacing the benchmark higher after London-listed miner Anglo American agreed to merge with Canada’s Tech Resources in a US$53 billion deal to create one of the world’s biggest copper producers.
The enlarged miner will keep its primary listing in London, providing a boon to the bourse which missed out on Klarna’s initial public offering as it struggles to keep companies on its exchange.
On the continent, Germany’s DAX 30 dipped 0.4% while France’s CAC 40 gained 0.2% after French president Emmanuel Macron named defence minister Sebastien Lecornu as his new prime minister after Francois Bayrou’s ouster earlier this week.
The kiwi traded at 50.61 euro cents from 50.54 cents yesterday.
Australian futures are pointing to a marginally positive start to the trading day when the S&P/ASX 200 index opens, while New Zealand’s S&P/NZX 50 index has a couple of companies shedding dividend rights in the form of Goodman Property Trust and Summerset Group Holdings.
Outside New Zealand’s benchmark, PGG Wrightson, Solutions Dynamics and the Private Land and Property Fund are also shedding rights to upcoming dividend payments, while ArborGen holds its annual meeting in Auckland today.
Retailer Briscoe Group is poised to report its first-half result today, having already signalled sales growth of 2.1% in the period and net profit of at least $29 million.
And the Financial Services Council kicks off its two-day conference in Auckland today, with keynote speeches from finance minister Nicola Willis and regulation minister David Seymour kicking off the industry gathering.
