Markets at a glance 2 October
Around the grounds
The S&P/ASX 200 is relatively flat in today’s trade as weakness in financials and tech offset gains in commodities on a soaring oil price and escalating tensions in the Middle East curbs risk appetite globally.
Breaking down the details across the bourse, Australian listed technology stocks are under pressure, with the broader index down nearly 2% in today’s trade snapping a four-day rally, after yesterday’s retail data rebounded more than expected in August, dampening RBA rate cut hopes. Markets are implying just an 18% chance of a cut at the Australian central bank’s next policy meeting on November 5th.
Rate-sensitive financials are also lower, with the index touching its lowest level since late August.
Energy plays are also in focus as the price of oil continues to march higher on fears of supply disruptions in the Middle East after Iran fired Ballistic missiles at Israel. Miners are also buoyant with the AXMM gaining ground after copper and aluminium prices closed higher overnight, while safe-haven gold is up 1% on stronger bullion prices.
In the news
Quick check in on some of the stocks to watch in today’s trade, and it’s all eyes on the latest broker moves. Jefferies has weighed in on Qatar Airway’s stake deal in Virgin Australia saying the move could negatively impact Qantas Airway’s (ASX: QAN) international division earnings in fiscal 2026.
As part of Qatar’s 25% stake buy in Virgin, the airline says it plans to launch flights from Brisbane, Melbourne, Perth, and Sydney to Doha with leased aircraft by mid-2025 which Jefferies says could have some impact to loads for Qantas and Emirates to Europe. Jefferies rates QAN as a ‘buy’ with a price target of AU$7.19 a share.
Qantas shares are up over 33% year to date as of last close.
Sticking with Jefferies, the broker remains downbeat on Australia’s IDP Education (ASX: IEL) amid a continued decline in student visas, down 23% during the month of August. ‘Underperform’ rating and price target of AU$13 per share is retained.
IEL shares are down over 20% year to date as of last close.
Finally, Morningstar says Aurizon Holdings’ (ASX: AZJ) underlying asset quality is good but has reduces its long-term growth expectations on lower capital expenditure assumptions. The broker downgrades the rail freight operator’s moat rating to ‘no-moat” but adds to stock remains undervalued and expects it to rerate higher as coal exports rebound.
The stock is down 7.4% year to date as of last close.
Going global
Rounding things out on the global stage, Asian equities are in the red after Iran’s missile strike on Israel sparked fears of a wider regional conflict.
Tokyo’s Nikkei 225 has slumped 1.5%, while MSCI’s broadest index of Asia-Pacific shares outside Japan have dipped half a per cent. There is thin trading elsewhere as mainland China are shut for the week-long Golden Week holiday and trading in Taiwan is suspended due to a typhoon. US futures meantime have come back online signally another negative start when the Wall Street session gets underway.
To currencies, the safe-haven dollar is trading close to its strongest level in three weeks against the euro, with a resilient job market state side stoking the fire for expectations of a smaller interest rate cut from the Fed in November.
The euro has remained in focus following the slowdown in the euro zone’s annual CPI rate, which should be enough to push the ECB over the line to cut interest rates again in October. The pound is also lacking after confirmation of a drop in the UK’s manufacturing PMI, and the yen is stable, recovering from steep losses earlier in the session benefiting from renewed demand for safe-haven assets.
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