Global Fundamental Analysis 25/03/2021

Global Fundamental Analysis 25/03/2021, FP Markets

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

Stocks ended lower amid a decline in tech shares. The 10-year Treasury note yield fell for a fourth consecutive session, recently trading at 1.624%, down from 1.637% Tuesday.

The WSJ Dollar Index was up 0.26% to 87.24. Oil prices posted a rebound as a shipping mishap blocked the Suez Canal. Gold prices scored their first gain in three sessions on safe-haven demand.

Australian Market

Australia’s S&P/ASX 200 index closed 0.5% higher, overcoming a sluggish start and a drag from energy stocks. The health and consumer sectors led gains by the benchmark index, which bounced back from a 0.1% decline in the previous session.

US Market

The Dow Jones Industrial Average gave up early gains even though investors piled back into economically sensitive sectors on bets that the U.S. economy will continue to recover.  

The index of blue-chip stocks ended the day flat, down less than 0.1%, as companies ranging from American Express to Chevron to Caterpillar showed relative strength. The S&P 500, however, declined 0.6%, adding to losses it endured Tuesday. The Nasdaq Composite Index fell more sharply, its losses accelerating in afternoon trading. The technology-heavy index dropped 2%.  

Markets have seesawed this week as investors have continued to assess the implications of a recent climb in bond yields, which, despite edging down this week, surpassed 1.7% this month for the first time in more than a year.

Commodities

Gold futures settled higher following back-to-back session declines, with support from some safe-haven buying, amid developments in Europe that suggest a longer lockdown period due to a renewed spread of Covid-19.  

Gold for April delivery rose $8.10, or 0.5%, to settle at $1,733.20 an ounce. On Tuesday, it shed 0.8% and posted the lowest settlement for a most-active contract since March 12, FactSet data show.

Oil Futures

Oil futures rose sharply to recover nearly all of the losses from the previous session, after a container ship ran aground in the Suez Canal, halting the flow of the Persian Gulf oil through the crucial waterway.  

West Texas Intermediate crude for May delivery rose 5.9% to settle at $60.76 a barrel on the New York Mercantile Exchange. May Brent crude, the global benchmark, rose about 6% to end at $63.92 a barrel on ICE Futures Europe. 

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1845 to lows near US$1.1810 and was near US$1.1815 at the US close. The Aussie
dollar rose from lows near US75.85 cents to highs near US76.25 cents and was near US75.90 cents at the US close. And the Japanese yen eased from 108.45 yen per US dollar to JPY108.93 and was near JPY108.70 at the US close.

European Markets

European sharemarkets were mixed on Wednesday. The composite purchasing managers index rose from 48.8 to 52.5 in March, indicating expansion of activity. A gauge of consumer confidence also rose. But the positive news was offset by concerns about fresh lockdowns across the continent. The pan-European STOXX 600 index was flat. But while the German Dax fell 0.4%, the UK FTSE index gained 0.2%. In London trade, shares in Rio Tinto rose by 1.4% while BHP rose by 0.5%.

Asian Markets

The Nikkei Stock Average closed 2.0% lower, with transportation, energy and bank stocks falling especially sharply amid concerns about a slow global recovery from the Covid-19 pandemic.  

China’s major stock benchmarks ended lower as cyclical shares became the latest sectors to weaken in a broad-market correction that started in late February.

The Shanghai Composite Index ended at 1.3% lower, while the Shenzhen Composite Index shed 1.4% and the ChiNext Price Index lost 1.3%. Recent falls have sent all three indexes into negative territory for the year. Companies that supply copper, aluminium and other non-ferrous metals led the declines, given the prospect of output curbs aimed at easing air pollution.

  • Global Fundamental Analysis 25/03/2021, FP Markets
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