The ASX Today

The ASX is indicating it will open higher despite weaker sentiment overseas.

ASX SPI 200 Futures closed 15 points higher at 7.30am AEST.

US markets ended lower last night. The Dow lost 0.24 per cent, the S&P 500 lost 0.22 per cent and the Nasdaq dropped 0.88 per cent.

It looks like energy stocks could provide some lift at the ASX open and select pockets of the resource sector, such as gold producers. At 8am AEST the larger gold producers were showing more upside pre-open, with larger energy stocks like Woodside and Santos still indicating a flat-to-higher start.

KEY POINTS

• Resources, namely gold, and energy stocks look set to open higher on commodity price rises and tensions overseas
• Australian dollar loses a little more, now buying US79.34c
• ANZ-Roy Morgan weekly consumer confidence data released today
• Speech delivered at 7.15am AEST by RBA Assistant Governor for Financial Stability, Michele Bullock
• No major companies go ex-dividend today

Oil surged overnight, perhaps on faith in OPEC plans, with WTI adding 3 per cent ($US52.08) and Brent crude putting on 4 per cent ($US59.03). There was also a drop of five rigs in the US Baker-Hughes rig count last week, revealed yesterday, and events unfolding in the Middle East suggest output won't be as great as some initially expected.

North Korea tensions have escalated again on the regime accusing the US of declaring war. This helped lift gold and bonds and drive down the US dollar. Gold has risen 1 per cent and is back at $US1310.

The ASX again saw weak price action yesterday where sectors cancelled each other out, with real weakness around resources, particularly iron-ore exposed stocks. SPI Futures traders seem marginally more bullish this morning, but there's a chance bearish sentiment could still sweep through local trade. 

This could be an instance though where the local market benefits from overexposure to resources and underexposure to technology. Chris Weston, an analyst from IG, has singled out tech stocks like Facebook and Apple this morning as feeling some heat yesterday on rising bond yields. With these companies trading at high PEs in a historical context, rising bond yields has a greater impact on their company valuations and discounting expected future cash flows back to the present day.