Five at Five AU: ASX teeters before settling flat as Energy sector slides on falling oil prices

Published 07/02/2025, 03:17 pm
Updated 07/02/2025, 03:30 pm
© Reuters.

The ASX slipped in early morning trade before recovering by midday, making a short foray into the green, and falling back to just about flat at -0.06% as of 3pm AEST.

The weakness in the market appears to be coming mostly from energy stocks, which have suffered from falling oil prices.

West Texas Intermediate Crude peaked at US$78.71 per barrel in mid-January, making a slow descent to US$70.96 over the intervening weeks.

Other oil indexes have followed almost identical trajectories, pushing the energy sector down 1.31%.

Yancoal Australia was one of the worst hit stocks, shedding 5.62% intraday to place it as one of the bottom performing stocks on the ASX today. It was joined by Beach Energy (ASX:BPT) Limited, another oil and gas company, which fell 4.72% intraday.

Strength in the Info Tech sector kept the bourse from falling too far, lifting 0.88% alongside a 0.53% lift to Consumer Staples.

Real Estate, Materials and Comm services also managed small gains, while Industrials, Health Care and Utilities fell.

Overall, the ASX has been virtually unchanged over the last five days and sits 0.6% below its 52-week high.

Bold investors buoy the bull market as they await jobs data

“The bull market seems intact with global stocks mostly marching up overnight, moving above their immediate-term trend line,” Jessica Amira, moomoo Australia market analyst writes.

“But there’s obstacles ahead. Bets are on for an almost 1% swing in either direction for US market once a jobs report is released Friday. It’s a big deal for the direction of markets in the short term as it’ll impact expectations for US rate cuts this year.

“In turn, that impacts earnings expectations for high-growth sectors. So, we’re set in a hold-your-breath kind of mode for global markets in the short term.

“All the above explains why investors are buying into defensive sectors such as consumer staples, which gained the most of all sectors overnight.

“Phillip Morris’s stock was the biggest gainer with shares surging 11%. The tobacco giant’s outlook seems remarkably strong to some investors, as its recent US approval for nicotine pouches has proved wildly successful, just as the world appears to be embracing emission-free tobacco products.

“Even in this wait-and-see environment fortune is favouring the bold (as always). Investors are being rewarded for buying into short-term pullbacks, or into long-term momentum-driven quality names.

“Speaking of, Palantir shares rose more than 8%, breaking into stratospheric new highs after its futures earnings were upgraded by Wall Street. Nvidia rose 3% with JP Morgan saying it will actually benefit from DeepSeek’s emergence.”

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