OPENING CALL: The Australian share market is to open higher.
U.S. stocks bounced back after a rough couple of sessions to settle sharply higher. The yield on the 10-year Treasury rose slightly to 0.70%. The WSJ Dollar Index fell to 88.26. Crude prices recovered alongside stocks, but were held back by demand worries. Gold prices benefited from the softening dollar.
Australian shares also tumbled, with energy shares hit hard as the S&P/ASX 200 closed 2.2% lower at 5878.6, its lowest level since June 29. Every sector of the benchmark index lost ground following the negative lead from the U.S.
U.S. stocks surged, rebounding after a three-session selloff in big technology stocks that pulled the Nasdaq Composite Index into correction territory.
The Dow Jones Industrial Average rose 440 points, or 1.6%, and the S&P 500 gained 2%. Both indexes are still lower for September.
Gold futures tallied a second straight session gain, finding support as the strength in the euro pressured the U.S. dollar, boosting the dollar-denominated metal’s appeal. December gold rose $11.70, or 0.6%, to settle at $1,954.90 an ounce after trading as low as $1,926.30.
Oil futures finished higher, with U.S. prices reclaiming less than half of the more than 7% drop suffered in the previous session as worries over the demand outlook, driven by the pandemic, continued to limit crude’s upside potential.
West Texas Intermediate crude for October delivery on the New York Mercantile Exchange rose $1.29, or 3.5%, to settle at $38.05 a barrel. November Brent crude, the global benchmark, rose $1.01, or 2.5%, to $40.79 a barrel on ICE Futures Europe.
The Euro and commodity currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US $1.1755 to highs near US$1.1825 and was near US$1.1810 at the US close. The Aussie dollar rose from lows near US72.05 cents to highs near US72.85 cents and was near US72.80 cents at the US close. But the Japanese yen eased from 105.80 yen per US dollar to JPY106.27 and was near JPY106.15 at the US close.
European sharemarkets closed higher on Wednesday with the pan-European STOXX 600 index up by 1.6%. Investors are looking ahead to a meeting of the European Central Bank. on Thursday. Shares in drug maker AstraZeneca rose 0.5% on reports that it may resume global trials of its experimental coronavirus vaccine next week. Telecoms rose 2.5%, insurers and technology both rose 2.2%. But travel & leisure fell 0.9%. The German Dax index lifted 2.1%. The UK FTSE index gained 1.4%. In London trade, shares in Rio Tinto rose by 1.9%, and shares in BHP lifted 1.7%.
Earlier Wednesday, the technology sector continued to weigh on Asian markets, following the tech selloff on Wall Street the previous day.
Chinese stocks ended the session sharply lower. The benchmark Shanghai Composite Index fell 1.9%. The Shenzhen Composite Index lost 3.2%, while the start-up heavy ChiNext Price Index slumped 4.8%.
Likewise, Japanese stocks settled broadly lower, with tech, auto and banks falling especially sharply. The Nikkei Stock Average declined 1.0%.