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ASX down 0.03% at noon as oil prices experience first weekly gain since October

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2023-12-18

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Oil prices increased after experiencing their first weekly gain since late October due to major shipping lines suspending transit through the Red Sea, which highlighted the potential risk to the crucial artery for global crude trade. Global benchmark Brent climbed above $77 per barrel, breaking a seven-week streak of declines, while West Texas Intermediate hovered near $72 per barrel. The tension in the Red Sea escalated after the US reported shooting down 14 drones launched from Iran-backed Houthi controlled areas of Yemen, leading major shippers like MSC Mediterranean Shipping and CMA CGM SA to announce their vessels' avoidance of the region, impacting crude oil prices.

At noon, the S&P/ASX 200 is 0.03 per cent lower at 7,440.40.

The SPI futures are pointing to a fall of 5 points.

Best and worst performers

The best-performing sector is Consumer Discretionary, up 0.63 per cent. The worst-performing sector is A-REIT, down 0.77 per cent.

The best-performing large cap is Boral (ASX:BLD), trading 2.41 per cent higher at $5.09. It is followed by shares in Allkem (ASX:AKE) and REA Group (ASX:REA).

The worst-performing large cap is Resmed (ASX:RMD), trading 2.08 per cent lower at $25.37. It is followed by shares in IGO (ASX:IGO) and AGL Energy (ASX:AGL).

Asian news

Asia-Pacific markets dipped Monday at the start of the penultimate week of 2023, after most markets in the region rallied last week following the U.S. Federal Reserve’s decision to hold rates and its roadmap for rate cuts in 2024 and 2025.

The Bank of Japan will meet for the last time this year. A note from Dutch bank ING said it expects the BOJ to maintain all its major policy settings, “though the overall tone about future policy at the press conference and statement could start to soften.“

A Reuters poll of economists also expects the BOJ to maintain its benchmark interest rate at -0.1%.

Separately, China will release its loan prime rates on Wednesday, while inflation data from Japan is due Friday.

Japan’s Nikkei 225 dropped 0.77%, while the Topix opened 0.8% lower.

South Korea’s Kospi struggled to make headway, while the small-cap Kosdaq was the only outlier rising 0.82% at open.

Futures for Hong Kong’s Hang Seng index stood at 16,690, pointing to a weaker open compared with the HSI’s close of 18,326.63.

Company news

Tamboran Resources (ASX:TBN) have entered into three formal and binding agreements with APA Group (ASX:APA) to support the development of the Company’s Beetaloo Basin assets. In response, Managing Director and CEO, Joel Riddle, said, “Under the agreements, APA will commence early development works associated with the SPP and Beetaloo to East Coast gas pipelines, including conditional expenditure of up to A$10 million to progress early work.” Shares are trading 9.38 per cent higher at 17.5 cents.

Adbri (ASX:ABC) has received a non-binding indicative proposal from CRH and the Barro Group at a price of $3.20 cash per share, a 41% premium to last close. CRH and the Barro Group have informed Adbri that the Proposal represents its best and final price in the absence of a competing proposal. Shares are trading 33.26 per cent higher at $3.03.

Cauldron Energy (ASX:CXU) advised that drilling has commenced at the Melrose Project, located in Western Australia. Cauldron CEO Jonathan Fisher commented, “We are excited by the technical information we have compiled on the Project so far, and look forward to further developing our understanding through this initial air core programme. The West Yilgarn remains one of the hottest areas of nickel exploration and we believe the large Melrose landholding and project characteristics position us well for su ccessful discovery.” Shares are trading 12 per cent higher at 2.8 cents.

Commodities and the dollar

Gold is trading at US$2032.30 an ounce.

Iron ore is 0.3 per cent higher at US$135.60 a tonne.

Iron ore futures are pointing to a 2.3 per cent fall.

One Australian dollar is buying 67.06 US cents.

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