Global Fundamental Analysis 25/02/2021

Global Fundamental Analysis 25/02/2021, FP Markets

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

U.S. stocks were higher, with the Dow industrials hitting a record. The 10-year Treasury note yield rose 2.5 basis points to 1.388%, after rising as high as 1.42%. The WSJ Dollar Index was down 0.10% to 84.91. U.S. oil futures marked 13-month highs. Gold prices ended lower for a second day. 

Australian Market

Australia’s S&P/ASX 200 index also closed 0.9% lower as investors sold shares of several companies that had reported earnings. The consumer staples sector defied the gloom, rising 0.8%.

US Market

The Dow Jones Industrial Average hit a new record after Federal Reserve Chairman Jerome Powell reiterated his intention to maintain ultralow interest rates and continue the bank’s asset-purchase policies.  

The blue-chip index rose 1.4% to a closing record. The blue-chip index crossed 32000 for the first time intraday earlier in the session. The S&P 500 gained 1.1% and the tech-heavy Nasdaq Composite added 1%. The Russell 2000 small-cap index, meanwhile, was up 2.4%. Two days of Mr Powell’s reassurances have soothed the market’s nerves.

Commodities

Gold futures fell for a second session, settling below the key $1,800 mark for the first time this week.

April gold prices fell $8, or 0.4%, to settle at $1,801.70 an ounce, marking the first finish below $1,800 since Friday. The precious metal declined by about 0.1% in the previous session but climbed by 1.7% on Monday.

Oil Futures

Oil futures settled at fresh 13-month highs, as data from the U.S. government showed weekly crude supplies edged up on the back of a sharp decline in distillate inventories.

West Texas Intermediate crude for April delivery rose $1.55, or 2.5%, to settle at $63.22 a barrel on the New York Mercantile Exchange – the highest front-month contract finish since Jan. 6, 2020, according to Dow Jones Market Data. April Brent crude climbed by $1.67, or nearly 2.6%, at $66.22 a barrel on ICE Futures Europe, with prices also at their highest since early January of last year.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.2173 to lows near US$1.2108 and was near US$1.2170 at the US close. The Aussie dollar rose from lows near US78.95 cents to session highs near US79.70 cents at the US close. And the Japanese yen fell from 105.45 yen per US dollar to JPY106.09 yen and was near JPY105.85 at the US close.

European Markets

European sharemarkets advanced on Wednesday. The pan-European STOXX 600 index gained 0.5% with travel and leisure stocks adding 1.9%. The German economy, as measured by GDP, grew by a better-than-expected 0.3% in the December quarter (survey: +0.1%). The German Dax index climbed 0.8% and the UK FTSE index lifted 0.5%. London-listed shares in Rio Tinto rose 0.7% and BHP shares were up 1.3%.

Asian Markets

The Nikkei Stock Average extended early losses to close 1.6% lower, weighed by electronics stocks. Trade-related developments may remain in focus following news that Japan’s Cabinet approved a bill to ratify the Regional Comprehensive Economic Partnership trade deal signed last year by 15 Asia-Pacific countries including China.  

China’s major stock benchmarks fell sharply on worries over elevated stock valuations and inflation. The Shanghai Composite Index shed 2.0%, down for the third consecutive day. The Shenzhen Composite Index also fell 2.0% while the ChiNext Price Index lost 3.4%.

  • Global Fundamental Analysis 25/02/2021, FP Markets
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