Australian shares tracked sideways this morning as the prospect of higher fuel prices following weekend fighting in Libya and a jump in the price of oil weighed on market sentiment.
At lunchtime the ASX 200 was unchanged at 4626 as gains in energy and gold stocks offset weakness among consumer stocks, industrials and other sectors vulnerable to reduced consumer spending. Energy and gold stocks topped sector gains, both rising 1%, ahead of IT +0.8%.
Crude oil jumped more than 2% this morning following a weekend of air and sea attacks on Libyan targets by a western coalition. Crude oil futures were recently up US$2.14 or 2.1% from Friday's close to US$103.21 a barrel. Gold also gapped higher, rising $12 or 0.85% to US$1,428 an ounce.
"I can see uncertainty and fear driving the price of oil higher in the short term," an analyst at CMC Markets in Australia told Fairfax. "At this stage, it looks like Libya has further to play. Gaddafi still seems very defiant. We'll see further spikes and shocks in the oil market this week."
US futures were increasingly bullish as Asian markets mostly shrugged off the rising oil price. Japan's Nikkei was closed for a bank holiday, but Shanghai rallied 0.31% and Hong Kong's Hang Seng 1.3%. Dow futures were recently at +54.
The dollar continued to recover from last week's sell-off as risk appetite picked up. The dollar was recently buying US 99.83 cents, up more than a quarter of a cent.
Geez this morning seemed slow after two weeks of gut-wrenching stuff. US futures seems relatively sanguine about the spike in oil, but crude has been creeping up all morning. There was little volatility in local shares this morning and I managed just one trade in NWE. Managed well that should have been a week's wages. It was not managed well, lol.
