Australia’s share market is set to to snap a four-session losing streak after oil prices declined as investors bet the re-escalation of conflict in the Persian Gulf will be short-lived.
The S&P/ASX200 gained 40.2 points by noon on Friday, up 0.46 per cent, to 8,802.9, as the broader All Ordinaries improved by 40 points, or 0.45 per cent, to 9,001.3.
The modest rebound puts the top-200 on track for a 0.75 per cent decline for the week, after losing ground the previous four sessions as US and Iranian tensions flared in the Middle East.
Despite exchanging fresh strikes on Thursday, a US official said technical talks between the two nations continued, claiming the US was committed to finding a solution with Iran, Bloomberg reports.
“Markets are taking the view that this latest flare-up will prove contained and short-lived,” IG market analyst Tony Sycamore said.
“Regional pushback reinforced that restraint — Oman told the United Nations it opposes Iran’s proposed transit fee for the Strait of Hormuz.”
The sentiment was reflected in the oil price, as West Texas crude eased to US72 a barrel, roughly on par with the first days of the conflict and well below April’s nearly $US118 peak.
Woodside and Santos weighed on local energy stocks, while refinery operators Viva and Ampol edged higher.
Uranium producers rallied for a second day, as Paladin Energy led the ASX200 with a 5.8 per cent charge following reports Australia is set to lift export volumes to India.
Basic materials surged more than two per cent after dragging on the exchange all week, as gold, copper, and iron ore producers found buyers.
Gold itself firmed to $US4,110 ($A5,918) an ounce as the greenback retreated against the major currencies.
BHP and Rio Tinto traded 2.4 per cent and 3.4 per cent higher, respectively, as copper improved for a second day, while iron ore continued to hover near March lows.
The heavyweight financials sector edged higher, tracking with the big four banks and Macquarie, putting the segment on track for a more than six per cent rebound since early June.
Consumer-facing stocks were less impressive, with staples shedding 0.5 per cent, and cyclicals falling twice as much after a number of downgrades from big investment houses this week, with Wesfarmers, Woolworths, Coles, JB Hi-Fi and Aristocrat Leisure all in the red.
The traditionally defensive sectors of health care (-1.8 per cent) and utilities (-0.9 per cent) were also under pressure as risk sentiment improved.
In company news, WiseTech Global has reassured shareholders its client relationship with DSV remains intact, rejecting speculation DSV was migrating to an in-house platform.
Telstra shares have clawed back another 0.3 per cent of Wednesday’s three per cent sell-off after boss Vicky Brady returned from overseas leave to apologise for a major outage.
The Australian dollar is buying 69.50 US cents, up from 69.39 US cents on Thursday at 5pm.
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