Higher oil and gold prices helped buoy the Australian sharemarket, even as investors mull over the implications of the shock attacks by militant group Hamas in Israel, which left hundreds dead over the weekend.
Smoke rises from an oil tank on fire after it was hit by a rocket from Gaza, near the Israeli town of Ashkelon, Israel.BetaShares chief economist David Bassanese said the key issue for markets was whether the conflict would restrict oil supply. “Israel and the regions involved in the conflict aren’t major exporters, but there could be a knock-on effect on Iran which is a major oil producer.”
Bell Direct market analyst Grady Wulff said while investors were “preparing for the worst” when it came to the impact on oil supply, the Australian sharemarket closed higher.“Energy companies naturally led the charge,” she said. “There’s no direct impact on oil demand or supply yet, but economies are preparing for the worst because they’ve seen the Russia-Ukraine conflict which is still going on.”
The US dollar and Japanese yen advanced on haven demand, seeing gains versus the euro and pound, while riskier currencies including the Australian dollar slipped. The Australian dollar was fetching US63.57¢ at the close. The data raises the possibility of another interest rate hike, especially if rising oil prices add to already high global inflationary pressures.
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