Global Fundamental Analysis 26/03/2021

Global Fundamental Analysis 26/03/2021, FP Markets

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

Stocks ended higher amid signs of an economic recovery. The yield on the 10-year note edged down to 1.63%. The WSJ Dollar Index was up 0.20% to 87.43. Oil ended lower, pressured by risks to energy demand. Gold lost as much as it gained a day earlier.

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 S&P 500 rose in the afternoon after the broad index flirted with a third straight day of losses.  

The S&P 500 recovered from a nearly 1% drop earlier in the session and traded up 0.5% as of the 4 p.m. ET close of trading. Stocks closely tied to an economic recovery led the rebound while some ongoing weakness among high-growth stocks and shares of energy companies held back the S&P 500 and other major indexes from moving meaningfully higher. 

Similar to the S&P 500, the Dow Jones Industrial Average was up about 0.6%. The Nasdaq Composite traded up only 0.1%, underscoring the weakness in tech, a day after tumbling 1.7%.

Commodities

Gold futures ended lower, stuck in a tight trading range as investors awaited a catalyst to break the precious metal out of its trading range.  

Gold for April delivery fell $8.10, or 0.5%, to settle at $1,725.10 an ounce. Prices for the most-active contact had posted an identical dollar and percentage gain on Wednesday.

Oil Futures

Crude-oil futures finished lower as worries over rising Covid-19 cases in major oil-consuming countries outside the U.S. underlined worries over the energy demand outlook.  

West Texas Intermediate crude for May delivery fell 4.3% to settle at $58.40 a barrel on the New York Mercantile Exchange. Prices gave up much of the 5.9% rise seen on Wednesday and traded down nearly 5% week-to-date. May Brent crude, the global benchmark, dropped 3.8% to $61.59 a barrel on ICE Futures Europe, following a 6% rise a day earlier.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1825 to lows near US$1.1760 and was near US$1.1765 at the US close. The Aussie dollar fell from highs near US76.13 cents to lows near US75.63 cents and was near US75.80 cents at the US close. And the Japanese yen eased from 108.90 yen per US dollar to JPY109.23 and was near JPY109.15 at the US close.

European Markets

European sharemarkets were mixed on Thursday. The pan-European STOXX 600 index fell by 0.1%, weighed down by a 2.1% drop in oil and gas stocks. But the German Dax index rose by 0.1% supported by Volkswagen’s (+4%) promising profit outlook. The UK FTSE index shed 0.6% on fears the EU could limit Covid-19 vaccine flows. In London trade, shares in Rio Tinto (-1.3%) and BHP (-1.7%) both fell.

Asian Markets

The Nikkei Stock Average closed up 1.1%, led by especially strong gains in electronics and financial stocks, following four consecutive sessions of losses.  

China’s major stock benchmarks rose 1.1% in a muted session. The Shanghai Composite Index lost 0.1%, while the Shenzhen Composite Index ended flat and ChiNext Price Index added 0.8%.

Combined daily turnover on the Shanghai and Shenzhen stock exchanges dropped below CNY680 billion, the lowest level so far this year, according to Wind. This likely shows that investors see few apparent catalysts after the A-share market’s pullback from a high in February, partly due to worries over rising U.S. Treasury yields and potential monetary tightening by China’s central bank.

  • Global Fundamental Analysis 26/03/2021, FP Markets
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