Global Fundamental Analysis 27/10/2020

Global Fundamental Analysis 27/10/2020, FP Markets

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

U.S. stocks plummetted amid a surge in Covid cases across much of the Western world. The WSJ Dollar Index climbed to 88.11. The yield on the 10-year Treasury ticked lower to 0.80%. Oil prices fell as Libya resumed production. Gold prices rose, but were kept in check by a strengthening dollar.

Australian Market

Australian shares gave up early gains to close 0.2% lower. The S&P/ASX 200 index gained as much as 0.6% in the first hour following positive leads from the U.S., but faded on weakness from materials, financials, tech and consumer discretionary.

US Market

Stocks dropped sharply as coronavirus cases surged in the U.S. and Europe, adding to worries about the economic outlook after Congress and the White House failed to agree on a much-anticipated fiscal stimulus deal.

The Dow industrials fell 2.3%, the worst day for the blue chips since Sept. 3. The S&P 500 dropped 1.9%, and the Nasdaq Composite fell 1.6%.

Among the biggest decliners were the travel and leisure stocks that have come under the most pressure this year during the pandemic.

Commodities

Gold futures eked out their fifth gain in six sessions, finding support as global equities fell in response to rising covid-19 cases in the U.S. and Europe.

A stronger U.S. currency, however, served to limit gains for the dollar-denominated yellow metal.

Gold for December delivery tacked on less than 0.1%.

Oil Futures

U.S. benchmark oil prices fell sharply, ending the session down 3.2% amid worries of excess global supplies due to Libya’a resumption of production and exports.

Oil investors have also become risk averse due to a drop in U.S. stock markets, persistent worries of weak oil demand due to coronavirus, and the failure of Washington lawmakers to pass a stimulus bill.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1846 to lows near US$1.1803 and was near US$1.1810 at the US close. The Aussie dollar rose from lows near US71.04 cents to highs near US71.45 cents and was near US71.25 cents at the US close. And the Japanese yen held between 104.80 yen per US dollar and JPY105.04 and was at JPY104.85 at the US close.

European Markets

European share-markets closed lower on Monday. The pan-European STOXX 600 fell by 1.8% with tech shares down 7.4%. The German Dax index lost 3.7% after shares of German software maker SAP slid 21.9% – the most in 24 years – following a cut to its sales forecast. The UK FTSE index fell by 1.2%. In London trade, shares of Rio Tinto fell by 2% and shares in BHP lost 1.8%.

Asian Markets

Earlier Monday, Chinese stocks ended the day mixed. The benchmark Shanghai Composite Index was the only major index to decline, ending 0.8% lower. The Shenzhen Composite Index gained 0.5%, while the ChiNext Price Index rose 0.7%. The renewable-energy and electronics sectors were among the top risers, while financial companies and banks weighed.

Japan’s Nikkei Stock Average slipped 0.1%, hurt by losses in steel and financial-related stocks.

  • Global Fundamental Analysis 27/10/2020, FP Markets
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