Opening Call: The Australian share market is to open higher.
U.S. stocks finished higher for the second-straight session. The 10-year Treasury note yield was up 8.4 basis points at 1.29%. The WSJ Dollar Index fell 0.22% to 87.48. U.S. oil prices ended up more than 4% as inventories at Cushing declined to an 18-month low. Gold prices settled at their lowest in nearly two weeks.
Australia’s S&P/ASX 200 index closed 0.8% higher, joining the rebound in global stocks despite the country’s continuing Covid lockdowns. The benchmark followed a positive lead from the U.S., where buyers stepped in following sharp week-opening losses.
The heavyweight financial and materials sectors, which together comprise almost 50% of the ASX 200’s market capitalization, added 1.0% and 1.1%, respectively. The ASX 200 is down 0.5% so far this week.
U.S. stocks rose, extending the previous session’s rebound, as investors turned their focus to the banner start to corporate earnings season. The S&P 500 climbed 0.8%, a day after the broad market gauge posted its biggest one-day gain since late March. The Dow Jones Industrial Average rose 0.8% and the Nasdaq Composite added 0.9%.
Earnings season has helped buoy sentiment. Through Tuesday, 85% of S&P 500 companies that had filed quarterly results topped analysts’ expectations, according to FactSet.
Gold futures lost ground, holding above the $1,800-an-ounce threshold but settling at their lowest in nearly two weeks, as U.S. Treasury yields continued to bounce off five-month lows, dulling demand for the precious metal.
August gold fell 0.4% to settle at $1,804.90 an ounce on Comex after touching a low at $1,794.30. The settlement was the lowest for a most active contract since July 8, FactSet data show.
Oil futures posted a more than 4% gain as a decline in crude stocks at the Cushing, Okla., storage hub to the lowest level since early 2020 provided support, outweighing any pressure from the first weekly U.S. crude inventory rise since mid-May.
West Texas Intermediate crude for August delivery rose 4.6% to settle at $70.30 a barrel on the New York Mercantile Exchange, extending a 1.3% rise from Tuesday. September Brent crude, the global benchmark, gained nearly 4.2% to settle at $72.23 a barrel on ICE Futures Europe. The Energy Information Administration reported that U.S. crude inventories rose by 2.1 million barrels for the week ended July 16, marking the first weekly rise in nine weeks.
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1750 to highs near US$1.1805 and was near US$1.1800 at the US close. The Aussie dollar rose from lows near US72.90 cents to US73.60 cents and was near US73.55 cents at the US close. But the Japanese yen eased from 109.80 yen per US dollar to JPY110.35 and was near JPY110.25 at the US close.
European sharemarkets rose on Wednesday in response to positive earnings results from blue-chip companies. Swedish transportation equipment maker Thule rose 12.2% in response to the latest earnings while British fashion retailer Next jumped 7.5% on lifting its profit forecast. And banks rose 2.9% in response to higher bond yields. The pan-European STOXX 600 index rose by 1.7% – its best session in 11 weeks. The German Dax index gained 1.4% while the UK FTSE lifted by 1.7%. In London trade, shares in Rio Tinto rose by 2.3% and BHP rose by 2.7%
Japan’s Nikkei Stock Average closed 0.6% higher after data showed Japan’s exports rose for a fourth-straight month in June. CBA said the stronger-than-expected trade data marks a bright spot in an economy that is still battling high Covid-19 infection rates. “Nevertheless, the domestic situation is a drag on Japanese economic growth and one of the reasons we expect the Bank of Japan to maintain the ultra-easy monetary policy.”
Chinese stocks ended the session higher, supported by new-energy industries and carmakers. The Shanghai Composite Index rose 0.7%, the Shenzhen Composite Index ended 1.5% higher, and the ChiNext Price Index gained 2.8%.