Global Fundamental Analysis 16/10/2020

Global Fundamental Analysis 16/10/2020, FP Markets

OPENING CALL: The Australian share market is to open lower.

U.S. stocks edged lower on rising Covid-19, economic risks. The 10-year Treasury note yield edged up to 0.736%, from 0.721% Wednesday. The WSJ Dollar Index recently was up 0.43% to 88.70. Crude oil prices ended lower as Europe lockdowns fed demand concerns. Gold futures shifted course to end higher as European lockdowns and Brexit worries lifted haven demand.

 

Overnight Summary

EACH MARKET IN FOCUS

Australian Market

Australia’s S&P/ASX 200 index ended the session up 0.5% to close at 6210.3, led higher by energy stocks. Nine of 12 sectors rose as the benchmark rallied from a 0.3% loss to record an eighth gain in nine sessions. Energy gained 2.5% after oil prices rose overnight.

US Market

U.S. stocks ended slightly lower as tightening coronavirus lockdowns in Europe and a weakening jobs picture in the U.S. cast a shadow on markets.

The S&P 500 fell 0.2%, dragged lower by the communication services, health care and technology sectors. The Dow Jones Industrial Average slipped less than 0.1% and the tech-heavy Nasdaq Composite slid 0.5%.

Commodities

Gold futures recovered early losses to finish with a modest gain, as traders favored the precious metal as a haven investment, despite a rise in the U.S. dollar, following the week’s decline in gold prices.

December gold for December delivery on Comex tacked on $1.60, or 0.08%, to settle at $1,908.90 an ounce after a 0.7% gain on Wednesday. Prices Thursday had touched an intraday low of $1,892.70, highlighting fitful trade for bullion on the week.

Oil Futures

Oil futures settled a bit lower as rising COVID-19 infections led to renewed restrictions on movement in several European countries, raising concerns over a further slowdown in energy demand.

West Texas Intermediate crude for November delivery fell 8 cents or 0.2%, to settle at $40.96 a barrel on the New York Mercantile Exchange. The global benchmark, December Brent crude, shed 16 cents, or 0.4%, to $43.16 a barrel on ICE Futures Europe.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1758 to lows near US$1.1687 and was near US$1.1700 at the US close. The Aussie dollar fell from highs near US71.37 cents to lows near US70.56 cents and was near US70.90 cents at the US close. And the Japanese yen eased from 105.16 yen per US dollar to JPY105.48 and was near JPY105.40 at the US close.

European Markets

European sharemarkets fell sharply on Thursday. The panEuropean STOXX 600 index lost 2.1% with France declaring a public health state of emergency as virus infections surged. Shares of French hotel company Accor shed 5.3%. The German Dax index dipped 2.5%. And the UK FTSE index fell by 1.7% as the British government imposed tighter virus restrictions in London. In London trade, shares of Rio Tinto (-1.1%) and BHP (-1.2%) fell.

Asian Markets

Japanese stocks closed lower on reduced hopes for a fiscal stimulus package before the U.S. elections in early November.

The Nikkei Stock Average ended down 0.5% to close at 23507.23, led by a mixed bag of sectors. Among the worst-performing sectors were pulp & paper, pharmaceutical and foods.

China’s major stock benchmarks closed lower for the second straight session. The Shanghai Composite Index was down 0.3% at 3332.18, while the Shenzhen Composite Index was off 0.7% and the ChiNext Price Index ended 1.0% lower. Consumer-service providers continued to dominate the losers. Banking stocks posted moderate gains after fresh government data showed China’s credit growth last month exceeded market expectations.

  • Global Fundamental Analysis 16/10/2020, FP Markets
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