Brent crude oil futures fell almost 7% and stocks on Wall Street rallied as Iran’s retaliation to the US strike on its nuclear sites was limited to American airbases in Qatar and Iraq, leaving shipping lanes in the Strait of Hormuz untouched.
Airlines on Wall Street reversed earlier declines, and the heightened tensions aren’t expected to disrupt Virgin Australia’s return to the ASX, with futures pointing to a strong day for the Australian benchmark equity index.
Meanwhile, Australian stockbroker Shaw & Partners has reportedly taken a controlling stake of Investment Services Group, the parent of Devon Funds Management and JMI Wealth, in the latest shake-up of New Zealand’s financial services sector.
And virtual fencing firm Halter has become New Zealand’s latest unicorn with a US$1 billion valuation after raising US$100 million in a fundraising round led by global tech investor BOND.
Calm heads?
Brent crude oil futures were down 6.8% at U$70.67 a barrel at 7am in Auckland as investors reacted to Iran’s strike on US airbases in Qatar and Iraq. Investors had been on edge waiting for the response to the US strikes on nuclear sites over the weekend, with fears the Middle East nation might have disrupted the Strait of Hormuz shipping channel.
“The market’s key concern has been Iran disrupting the flow of oil through the Strait of Hormuz, which carries over a fifth of seaborne oil flows, but there is no sign of Iran going down that track,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Risk assets improved after the attack, with the market taking it as a signal that Iran didn’t want to take down oil infrastructure.”
Stocks on Wall Street rallied, with the S&P 500 up 0.8%, and the kiwi dollar gained to 59.76 US cents at 7am from 59.21 cents yesterday.
Airlines reversed earlier declines with American Airlines up 2.9% in late trading and United Airlines advancing 3.4%. European carriers had been weaker during their trading session before the Iranian retaliation.
Virgin’s return
That comes ahead of Virgin Australia’s return to the ASX in its A$685 million initial public offering, which Australian investors are hoping will trade well despite the recent ructions in oil markets – a key cost for carriers. Australian futures are pointing to a 0.6% gain for the S&P/ASX 200 index.
Tesla surged 8.5% after launching its Robotaxi service in Austin, Texas on Sunday and Northern Trust gained 7% after the Wall Street Journal reported the firm was approached by Bank of New York Mellon over a potential merger.
Hims & Hers Health, a popular stock among Sharesies users, slumped 33% after Novo Nordisk ended its collaboration with the telehealth firm to distribute its Wegovy weight-loss drug. Meanwhile, Rocket Lab, another local favourite, climbed 9%.
A new arrival
Meanwhile, the Australian Financial Review’s Street Talk column reported Australian stockbroking firm Shaw & Partners has agreed to buy a 75% stake of Devon Funds-parent ISG for a reported $67.5 million as it seeks to expand its footprint on this side of the Tasman.
And New Zealand-founded virtual fencing firm Halter has raised US$100 million in a fundraising round led by global tech investor BOND, giving it a US$1 billion valuation. NewView joined Halter’s register as a new investor, while existing investors Bessemer Venture Partners, DCVC, Blackbird, Icehouse Ventures and Promus Ventures also participated.
Fletcher Building holds its investor day today, where it will update shareholders and analysts on the progress of its strategic review, and New Zealand Windfarms shareholders will today vote on whether to approve Meridian Energy’s takeover through a scheme of arrangement.
Local data today include the Reserve Bank’s credit card spending and balances for the month of May.
Reporting by Paul McBeth. Image from István Szitás on Unsplash.
