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ASX 200 morning report – AGL, QAN & energy shares in focus

The trends of the last two weeks look to set to accelerate for the rest of March, with the S&P/ASX 200 (ASX: XJO) following the lead of US futures to fall another 1% to open the week.

Oil price nears US$140

As has been the case since the invasion of Ukraine began, the energy sector remains the biggest beneficiary, gaining 5.3% with Woodside Petroleum Limited (ASX: WPL) a major contributor, jumping 9.5% to a two-year high.

The driver was simple, President Biden has floated the idea of banning all Russian oil imports, something Europe has been loath to do, which sent the oil price to nearly US$140 per barrel for the first time in years.

Other beneficiaries include Beach Energy Ltd (ASX: BPT), which jumped 6.3% on the news.

ASX gold shares shine

The ASX materials sector was the only other area of the market that managed to finish higher, gaining 1% on the back of a surging gold price which is now over AUD$2,700 and nearing US$2,000.

The primary beneficiaries were Northern Star Resources Ltd (ASX: NST) and Newcrest Mining Ltd (ASX: NCM), which were up 6.1% and 5.3%, respectively, as investors flock to the most powerful hedge against volatility.

Despite the uncertainty, the rally in the AUD continued, reaching 74 cents overnight.

Qantas smashed

Among the hardest hit from the soaring oil price is the beleaguered ASX travel sector, with shares in Qantas Airways Limited (ASX: QAN) falling 7.9%.

One of the company’s biggest expenses is aviation fuel and with many prebooked flights, it is likely that margins will be hit if the oil price remains elevated.

‘Pens down’ on AGL bid

The Mike Cannon-Brookes and Brookfield consortium have said it is time to put ‘pens down’ on their aggressive deal to take over AGL Energy Limited (ASX: AGL).

An improved offer or $8.25 per share was once again rebuffed by the board, who seem set on a costly demerger, with AGL shares falling 1.8% on the news. It’s unlikely this is the end of the AGL story.

ASX tech weakness accelerates

Technology remains the most difficult place to be in the market with the sector falling another 4.7% and Aussies experiencing Nasdaq-level volatility.

Block (ASX: SQ2) was the worst performer on the market, falling 10.3%.

Unibail-Rodamco-Westfield (ASX: URW) wasn’t far behind with the predominantly European domiciled retail assets likely impacted by the invasion, sending shares 9.5% lower.

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