Australia's ASX set to open lower as Wall Street falls and oil rises
Australian shares are set to start the week lower, with futures pointing to a 0.4% fall in the ASX 200 on Monday. The weaker opening comes after sharp declines on Wall Street in the previous session, when both major US indexes fell from record highs. The Australian dollar is also down, adding to the cautious tone in early trading.
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The move in futures was reported ahead of the local market open on 18 May, with the ASX 200 described as having had a difficult May so far. The index is said to be virtually flat for the year to date, down by less than 1%, after a strong February. Brent crude was trading above US$109 a barrel after rising more than 3%, with the increase linked to uncertainty around the Iran war.
Higher oil prices can feed into broader market concerns because they affect transport, energy and inflation expectations. For Australian investors, the combination of weaker US markets, a softer currency and rising crude prices points to a more cautious start to the trading week. The immediate focus is on whether the local market follows the negative lead from overseas.
The latest move also comes against the backdrop of a year in which the ASX has struggled to build on earlier gains. The futures market is often watched as an early signal of sentiment before the opening bell, although it does not guarantee the direction of the day's trade. In this case, the signal reflects both global market weakness and the impact of geopolitical uncertainty on commodity prices.
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The rise in Brent crude is significant because oil remains a key input for many parts of the economy and a major driver of market expectations. A sustained increase can affect company costs and consumer prices, while also influencing sectors linked to energy and resources. The Australian dollar's decline may also matter for import costs and investor sentiment, although no further detail was provided on the size of the move.
What remains unclear is whether the early weakness will persist through the session or ease if global sentiment improves. Traders will be watching the ASX open, further moves in oil and any fresh developments affecting the Iran war. The main question for the day is whether the local market can recover from the negative lead set by overseas trading.
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