Global Fundamental Analysis 22/09/2021

Global Fundamental Analysis 22/09/2021, FP Markets

Opening Call: The Australian share market is to open lower.

U.S. stocks ended mixed in a choppy trading session. The 10-year Treasury note yield was at 1.323%, compared with 1.308% on Monday. The WSJ Dollar Index fell 0.05% to 87.79. U.S. oil futures ended higher, supported by bets for a weekly drop-in U.S. crude supplies. Gold scored back-to-back gains.

Australian Market

Australia’s S&P/ASX 200 index closed 0.4% higher as energy stocks helped the benchmark index turn around from Monday’s three-month low. Almost all sectors finished higher, with energy stocks the best performer, gaining 1.5%, while the tech sector gained 1.3%.

US Market

U.S. stocks finished mixed, following earlier losses on fears about China’s property sector that helped fuel a global selloff in stocks and commodities. The Dow Jones Industrial Average slipped 0.2%. The S&P 500 retreated 0.1% and the Nasdaq Composite advanced 0.2% following the two indexes’ worst one-day pullback since May.

To those who felt like markets had been overdue for some kind of pullback following a relatively sanguine summer, Monday’s retreat appeared to have delivered on that front. Now, investors say, the focus shifts to how markets will fare as the pace of the global economic recovery cool and central bankers prepare to wind down some of the support they lent to markets at the start of the pandemic.

Commodities

Gold futures settled higher for a second straight session, as the U.S. dollar edged back, helping to extend gains for the precious metal, which has been partially supported by worries about a possible default by one of China’s largest property companies. “The potential for a financial contagion inside China, ongoing infection issues in China, significant global equity market declines and the potential for significant Chinese stimulus provide the gold bulls with plenty of ammunition,” analysts at Zaner said in a note. December gold rose 0.8% to settle at $1,775.80 an ounce, following a 0.7% rise on Monday, which halted a three-session skid.

Oil Futures

Oil futures ended higher, supported by expectations for weekly drop-in U.S. crude inventories, a day after a broad selloff attributed to jitters about the impact of a default by Chinese property giant Evergrande. West Texas Intermediate crude for October delivery tacked on 0.4% to finish at $70.56 a barrel on the New York Mercantile Exchange on the contract’s expiration day. November WTI crude, which is now the front-month contract, rose 0.5% to settle at $70.49 a barrel.  

November Brent crude, the global benchmark, climbed 0.6% to settle at $74.36 a barrel on ICE Futures Europe. “It’s one of those rollercoaster days as the market … seemed confused over how to interpret two opposing forces: the concern over the effect of China’s Evergrande possible default and the tight U.S. supply signs,” Nishant Bhushan, oil markets analyst at Rystad Energy, wrote in a daily commentary.

Forex

Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1748 to lows near US$1.1715 and was near US$1.1725 at the US close. The Aussie dollar eased from highs near US72.82 cents to lows near US72.21 cents and was near US72.30 cents at the US close. But the Japanese yen rose from 109.68 yen per US dollar to JPY109.18 and was near JPY109.20 at the US close.

European Markets

European sharemarkets rose on Tuesday with the pan-European Stoxx 600 index up by 1%, rebounding from the biggest fall in two months. Shares of British sports betting company Entain surged 18% on reports that US rival DraftKings made a US$20 billion takeover offer for the company. The German Dax index lifted 1.4% and the UK FTSE index rose by 1.1%. In the London trade, shares in Rio Tinto slid 0.1%, but shares in BHP gained 0.4%.

Asian Markets

Japanese stocks ended lower, dragged by especially sharp falls in machinery and steel stocks, as concerns grow about troubles at the Chinese property sector. The Nikkei Stock Average fell 2.2%. Markets were closed in mainland China for a holiday.

  • Global Fundamental Analysis 22/09/2021, FP Markets
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