XTC General discussion, page-15

FYI

ASX expected to shine ascommodities surge after invasionThe Australian sharemarket is set for a positive start at Monday’s open, with the mining and energy sectors to lead the charge following widespread gains in commodity prices.SPI futures are pointing to a lift of 28 points, or 0.4 per cent, at the start of trade, despite weak overseas leads after sanctions on Russia sent oil, base metals and grain prices soaring.Among the leaders in Monday’s trade should be iron ore miners, energy, base metal and gold mining stocks, CommSec chief economist Craig James said.“We had some spectacular gains over the weekend in a lot of the mining and energy commodities, so there’s certainly the potential for support,” he told The Australian.Oil prices surged on Friday as the Russia-Ukraine war intensified. Brent crude rocketed 7 per cent to $US118.11, while WTI rose more than 8 per cent to $US115.7 a barrel.While the iron ore price was down slightly on Friday, losing 60c, over the week it gained 14 per cent to $US152.40 a tonne.The war had led to the Australian sharemarket outperforming its peers in recent weeks, Mr James added.“The Australian sharemarket has been outperforming for the simple reason that we hold a range of commodities that the rest of the world wants and that are in short supply at the moment,” Mr James said.“That goes for everything from wheat and iron ore to coal and natural gas.“But investors should continue to brace for volatility and will have to react quite sharply to movements that take place in the war zone and across the rest of the global economy.”But financial and technology stocks could take a hit in Monday’s trade, mirroring declines in overseas markets, he warned.US equity markets finished Friday’s session down between 0.5 and 1.66 per cent, with the Nasdaq the worst of the lot.European markets took an even bigger beating, finishing between 3.5 and 5 per cent lower.One major concern for traders was how the global banking system would fare if one or more of Russia’s major banks were to fail, Mr James said.“That’s what we’ve got to continue to focus on: the stability of the banking system and the contagion effects for the sanctions that are being applied on Russian banks,” he said. “We just have to ensure that authorities continue to stress-test the banks and make sure that our banking system remains resilient.”On the data front, all eyes will be on RBA governor Phil Lowe for any clue on rates when he speaks at two events this coming week.The NAB Business Survey is released on Tuesday and Westpac consumer confidence follows on Wednesday.