Opening Call: The Australian share market is to open higher.
U.S. stocks rebounded as many investors bought the dip. The yield on the 10-year Treasury ended its streak of declines, ticking higher to 1.36%. The WSJ Dollar Index fell to 86.9, helping gold mark its third straight weekly advance. Oil prices finished the session higher, but posted their first weekly decline in seven weeks.
Australia’s S&P/ASX 200 fell 0.9% amid signs Sydney’s Covid lockdown may be extended further. Tech stocks led widespread declines as the benchmark pared losses at the last moment but still fell by the most in almost three weeks. Global concerns about the pace of economic recovery also weighed.
The heavyweight financial and materials sectors dropped 0.9% and 0.6%, respectively. The energy was the only sector not to drop, gaining less than 0.1%. The ASX 200 lost 0.5% for the week.
The S&P 500 staged a strong rebound, finishing a topsy-turvy week at a fresh record. The S&P 500 added 1.1%, following its worst one-day retreat since June 18. The Dow Jones Industrial Average added 1.3%, and the Nasdaq Composite gained 1%, both closing at record highs.
Many investors rushed to buy the stock-market dip after Thursday’s declines, continuing a trend that has become a feature of the stock market’s rally over the past year. That desire, alongside easing concerns about the economic recovery, lifted stocks and overshadowed any worries about President Biden’s executive order to limit corporate dominance.
Gold futures booked again for the session, helping the commodity mark its third straight weekly advance, as choppiness in stocks, a tepid U.S. dollar and rapidly receding yields proved a bullish cocktail for bullion in a U.S. holiday-shortened week.
August gold futures traded 0.6% higher to settle at $1,810.60 an ounce, with a weekly advance of 1.53%, based on the previous Friday’s closing level. The weekly gain was the metal’s third in a row and the sharpest since the week ended May 21, FactSet data show, underscoring an uptrend taking hold in the yellow metal.
Oil futures ended sharply higher but were unable to fully erase a weekly loss as a spat between key OPEC members remained unresolved and worries mounted over the spread of the Delta variant of the coronavirus that may slow energy demand in some countries.
West Texas Intermediate crude for August delivery rose 2.2% to end at $74.56 a barrel on the New York Mercantile Exchange. September Brent crude gained 1.9% to finish at $75.55 a barrel on ICE Futures Europe. WTI and Brent futures each suffered a 0.8% weekly decline.
Crude maintained its gains in afternoon trade after oil-field-services company Baker Hughes said the number of U.S. oil rigs rose by 2 from last week to 378. Natural-gas rigs rose by 2 to 101.
Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1823 to highs near US$1.1881 and was near US$1.1872 at the US close. The Aussie dollar lifted from lows near US74.16 cents to highs near US74.93 cents and was near US74.75 cents at the US close. But the Japanese yen eased from 109.89 yen per US dollar to JPY110.24 and was near JPY110.13 at the US close.
European sharemarkets lifted on Friday. The pan-European STOXX 600 index closed up by 1.3% with shares of miners surging 4%. The German Dax index gained 1.7% and the UK FTSE index added 1.3%. As measured by GDP, Britain’s economy grew by 0.8% in May compared with April (survey: +1.5%). London-listed shares in Rio Tinto (+4.1%) and BHP (+4.3%) both traded higher.
Earlier Friday, Chinese stocks ended the session mixed, with the Shanghai Composite Index closing a hair lower. Gains by metal and mining companies were offset by losses in the food and beverage sector. The Shenzhen Composite Index edged 0.1% higher, while the ChiNext Price Index lost 0.7%.
Hong Kong’s Hang Seng Index gained 0.7%, ending an eight-session losing streak. Finance and retail stocks fell, while the consumer and technology sectors rose. The Hang Seng Tech index gained 1.5%, recovering from recent losses arising from China’s clampdown on the sector due to data security concerns.
Japanese stocks were dragged lower by declines in machinery and electronics stocks, as new Covid-19 state-of-emergency measures in Tokyo heightened concerns. The Nikkei Stock Average lost 0.6%. Covid-19 infection trends and the pace of vaccinations remained in focus.