It was another six-month high for Australia’s stock benchmark as the market avoided the selling seen in the likes of Japan, China and Korea. The ASX 200 rose for the 12th day in 15 while climbing 0.3% to 6263.9. Consumer stocks and utilities rose about 1% amid fresh declines in bond yields while REITs set their latest 2 1/2-year high, getting closer to a decade’s best. But materials shed 0.3%.
U.S. stocks slid intraday after the European Central Bank unveiled plans to deploy additional stimulus, raising fresh worries about the health of the global economy. Lingering questions about trade relations and the world economy have put a damper on the stock market’s 2019 rebound. The ECB’s messaging brought those worries to the forefront, showing investors that central bankers have become increasingly concerned about the slowdown across the eurozone. The central bank said it would leave interest rates unchanged at least through the end of the year, months longer than investors had previously expected. It also added that it would launch a fresh batch of ultracheap long-term bank loans. While those moves showed the ECB was willing to take aggressive steps to try to stimulate growth, it also highlighted the extent to which the global economic outlook has dimmed over the past year. Losses were broad, dragging nine of the S&P 500’s 11 sectors lower and putting the broad index on track for its worst weekly decline since December.
Gold futures finished lower as the European Central Bank slashed its forecast for eurozone growth and extended a pledge to hold off on interest-rate hikes until at least late this year, pressuring the euro and providing a boost to the U.S. dollar. The euro fell to four-month lows after the ECB said its ultralow interest rates wouldn’t rise at least until late 2019. Weakness in the currency led to a stronger U.S. dollar, which often weighs on dollar-denominated prices of gold. The dollar, as measured by the ICE U.S. Dollar Index, was up 0.6% at 97.414 as gold futures settled. The precious metal tracked the euro lower and “gold bulls will look to see if we finally see support hold if we test $1,270,” said Edward Moya, senior market analyst at Oanda. April gold fell by $1.50, or 0.1%, to settle at $1,286.10 an ounce after touching an intraday low of $1,280.80. Prices rose 0.2% a day earlier. On Tuesday, bullion marked its lowest settlement since Jan. 24, based on the most-active contract, according to FactSet data. In other commodity markets, March wheat prices fell 9 cents to $4.31 1/2.
Iron Ore: 84.16s + 0.76 (April Contract)
Oil prices closed at a one-week high, as investors focused on OPEC-led production cuts that have helped rebalance the market since the start of the year. Light, sweet crude for April delivery settled up 0.8% to $56.66 a barrel on the New York Mercantile Exchange, the highest settle value since Feb. 28. Brent, the global benchmark, gained 0.5% to $66.30. Crude prices have been buoyed in 2019 by production curbs from the Organization of the Petroleum Exporting Countries and its allies outside the oil cartel. Prices are “continuing to profit from the OPEC+ production cuts and the involuntary supply outages in Venezuela and Iran,” said Commerzbank analysts.
The euro fell to its lowest level against the dollar since November intraday, pressured by a dovish shift from the European Central Bank. The common currency was recently down 0.6% against the dollar at $1.1235, after hitting $1.1229 earlier in the session. Other European currencies, such as the Swiss franc, Norwegian krone and Polish zloty, also declined. In a major policy reversal, the European Central Bank said it planned fresh stimulus measures to kick-start the eurozone’s lackluster economy less than three months after phasing out a EUR2.6 trillion ($2.9 trillion) bond-buying program. The move – which includes holding interest rates at their current low levels at least through the end of the year and providing fresh cheap long-term loans to banks – makes the ECB the first developed-country central bank to ease monetary policy in response to slowing global growth.
The Stoxx Europe 600 Index finished down 1.60 points, or 0.43%, to 373.88, the largest one-day point and percentage decline since Feb. 8. The index now is down for two consecutive trading days and is down 1.76 points, or 0.47%, over the last two trading days. The FTSE 100 Index ended down 0.53%, or 38.45 points, to 7157.55, the largest one-day point and percentage decline since Feb. 27. The index snapped a four-trading-day winning streak and now is off 9.14% from its record close of 7877.45 hit May 22, 2018. The CAC-40 Index finished down 20.89 points, or 0.39%, to 5267.92, the largest one-day point and percentage decline since Feb. 8 and now is down for two consecutive trading days. The DAX finished down 69.83 points, or 0.60%, to 11517.80, the largest one-day point and percentage decline since Feb. 14 and was down for two consecutive trading days.
It was a mostly negative session in Asia, with Japan’s Nikkei 225 index down 0.7% and Hong Kong’s Hang Seng benchmark falling 0.9%. Chinese indexes were among the few Asian benchmarks to edge higher. The Wall Street Journal reported Sunday that negotiators were putting the finishing touches to a U.S.-China trade deal, although little new information has since emerged. Meanwhile, Chinese state-owned Huawei, which has been at the center of disputes over intellectual property, filed suit against the U.S. over a law that bans government agencies from buying its products. Shares in sector peer ZTE were down 8.9% in Hong Kong. Indian shares extended gains for the fourth straight session as bank and auto stocks provided support. The S&P BSE Sensex closed 0.2% higher at 36,725.42 amid cautious trading sentiment following recent gains. Investors will be watching macro data like industrial production and inflation scheduled next week for further cues.