ASX 200 flat; energy sector suffers on US-Iran talks

(AWP Alliance News) - Stocks in Sydney edged upwards while in the broader Asia Pacific region they

were broadly in the red ahead of the Reserve Bank of Australia's interest rate decision later today.

The S&P/ASX 200 was largely flat, 1.10 points higher at 8,857.60 on Tuesday afternoon.

The RBA is widely expected to deliver an interest rate hike with market consensus forecasting a 25 basis point increase to 4.85%.

ING analysts Deepali Bhargava and Francecso Pesole said: "Firmer-than-expected inflation data and broader pass-through from higher fuel costs reinforce our view that the RBA will deliver a 25bp rate hike on 3 November rather than wait until December.

"Almost all of the 90bp increase in headline CPI inflation of 4.3% YoY in September can be traced to higher transport costs, largely reflecting elevated fuel prices."

Transport prices increased 8.7% in September's consumer price inflation reading.

The decision is due at 1430 AEDT.

Meanwhile, 9 out of 11 sectors were higher in Sydney, with real estate the biggest winner.

The real estate sector was up 0.8% as LendLease gained 2.8%, Cromwell Property rose 2.2% and Mirvac was up 1.5%.

Arena REIT was also up 3.6%.

The Melbourne, Australia-headquartered real estate investment trust upped its dividend guidance for financial year 2027 as failed tenant Edge Early Learning agrees the sale of more of its businesses.

The firm said its expected dividend for the year ending June 30 2027 is 20.0 Australian cents per share, around USD0.13, reflecting the progress on its leasing of former Edge Early Learning-operated sites.

The new guidance towards the top of its previously announced range of 19.0 to 20.2 cents per share. This is a 3.9% increase on its dividend of 19.25 cents per share.

Arena on Monday said Goodstart Early Learning has purchased 24 businesses from under-administration Edge Early Learning, including 16 of the sites owned by Arena.

The deal brings the number of sale agreements for Edge businesses operating at its sites to 22.

The information technology sector rose 1.1%, while telecoms, consumer staples and consumer discretionary each gained 1.0%.

The energy sector suffered most, falling 3.9% as crude oil prices plunged.

Yancoal lost 5.5%, New Hope was down 5.1% and Nexgen fell 4.7%.

Brent oil was quoted at USD104.67 a barrel early in London on Tuesday from USD110.04 late Monday. West Texas Intermediate fell to USD96.56 a barrel from USD100.88.

The fall in oil prices comes as the US made progress in talks with Iran to avoid a return to war in the Middle East.

However, the US reportedly struck Iran's Qeshm Island in the Strait of Hormuz late on Monday.

Around midday in Tokyo, the Nikkei 225 was down 208.25 points, 0.3%, at 63,081.86 on Tuesday.

In China, the Shanghai Composite was down 34.72 points, 1.0%, at 3,603.31. The Hang Seng in Hong Kong was up 93.65 points, 0.4%, at 23,486.97. The FTSE TWSE Taiwan 50 Index was down 348.03 points, 0.8%, at 41,063.30.

In Seoul, the Kospi fell 172.64 points, 3.0%, at 5,686.44. In Mumbai, the Nifty 50 closed up 387.70 points, 1.7%, at 23,440.80. Over in Singapore, the Straits Times Index was down 20.92 points, 0.4%, at 5,282.91.

Gold was quoted at USD3,949.39 an ounce against USD3,900.60.

The dollar strengthened against the yuan to CNY6.6702 from CNY6.6477, but weakened against the yen to JPY157.89 from JPY157.93 and strengthened against the Australian dollar to AUD1.4287 from AUD1.4237.

The euro strengthened to USD1.1183 from USD1.1169, while the pound also strengthened to USD1.3402 from USD1.3385.

The yield on the US 10-year Treasury was quoted at 4.92%, narrowing from 4.93%. The yield on the US 30-year Treasury was quoted at 5.29%, narrowing from 5.30%.

In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 1.8% and the Nasdaq Composite down 2.9%.

Apple ended its financial year with a quarterly revenue beat with iPhone sales ahead of forecast.

The Cupertino, California-based technology company said net income rose to USD30.71 billion in the three months ended September 30, the fourth quarter of Apple's financial year, from USD27.47 billion the year prior.

Revenue was up 12% to USD114.48 billion from USD102.47 billion, ahead of Visible Alpha consensus of USD113.6 billion.

IG says futures indicate London's FTSE 100 is to open 0.2% lower on Tuesday, Frankfurt's DAX 40 0.6% lower and the CAC 40 in Paris down 0.2%.

Still to come on Tuesday's economic events calendar are the US Redbook index, US factory orders and vehicle sales figures and France's budget balance.

By Harvey Dorset, Alliance News reporter

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