Opening Call: The Australian share market is to open lower.
U.S. stocks edged lower on the day but finished August with gains. The 10-year Treasury note yield rose to 1.303% compared with 1.284% on Monday. The WSJ Dollar Index fell 0.08% to 87.32. U.S. oil prices settled lower as traders watched Hurricane Ida recovery efforts and ahead of the OPEC+ meeting. Gold futures ended higher with U.S. consumer confidence at a six-month low.
Australia’s S&P/ASX 200 index closed 0.4% higher, led by rebounding tech and consumer stocks. The benchmark added to its week-opening 0.2% rise, with the tech sector adding 1.9%. The financial and materials sectors, which together account for about 50% of the ASX 200 by market capitalization, closed flat.
U.S. stocks eased for the day but ended the month higher as major indexes wrapped up trading for August. The S&P 500 lost 0.1%, a day after the broad index notched its 53rd record close of the year. The Dow Jones Industrial Average fell by about 0.1%. The technology-heavy Nasdaq Composite traded down less than 0.1%. All three indexes held onto monthly gains. The S&P 500 was up about 2.9% for August, its seventh consecutive monthly rise.
The gains mark its longest winning streak since January 2018, when the index rose for 10 straight months. The Dow has added 1.2% month-to-date, marking its second consecutive monthly win. The Nasdaq was up about 4% for the month, its third consecutive month of gains.
Gold futures ended higher, with prices tallying a slight gain for the month, as the metal found support following data showing a drop in U.S. consumer confidence to the lowest level in six months. December gold rose 0.3% to settle at $1,818.10 an ounce after trading as low as $1,803.40. For the month, prices based on the most active contract finished up by less than $1 from the July 30 settlement of $1,817.20, according to Dow Jones Market Data.
Oil futures traded lower, with U.S. Gulf Coast refineries struggling to resume operations after being knocked offline by Hurricane Ida. West Texas Intermediate crude for October delivery fell 0.5% to $68.87 a barrel on the New York Mercantile Exchange. For the month, prices for the front-month contract traded about 6% lower.
Global benchmark October Brent crude, which expires at the end of the trading session, was off 0.5% at $71.59 a barrel on ICE Futures Europe, on track for a monthly loss of more than 3%. Traders were also looking ahead to a Wednesday meeting of the Organization of the Petroleum Exporting Countries and its allies, a group collectively known as OPEC+.
Major currencies were weaker against the US dollar in European and US trade. The Euro eased from highs near US$1.1845 to lows near US$1.1795 and was near US$1.1805 at the US close. The Aussie dollar fell from highs near US73.40 cents to lows near US73.05 cents and was near US73.15 cents at the US close. And the Japanese yen eased from near 109.60 yen per US dollar to JPY110.05 and was near JPY110.00 at the US close.
European share markets were weaker on Tuesday after data showed that eurozone inflation rose from 2.2% to a 10-year high of 3% in August. The pan-European STOXX 600 index fell by 0.4% but was still higher for the seventh straight month – the longest winning streak since 2013. The German Dax index lost 0.3% despite data showing a bigger fall in unemployment than expected in August. And the UK FTSE index fell by 0.4%. In London trade shares in Rio Tinto fell by 0.4% and shares in BHP lost 1.0%.
Japan’s Nikkei Stock Average closed 1.1% higher, helped by gains in shipping and precision-instrument stocks. Coronavirus-related developments should remain in focus, following Japan’s confirmation of a new type of Delta variant in the country.
Chinese stocks ended the session mixed, as the market weakened slightly from an upturn since late last week. The benchmark Shanghai Composite Index rose 0.4%, marking its third consecutive trading day of gains. However, the Shenzhen Composite Index fell 0.5% while the ChiNext Price Index slid 1.8%.
The mining industry continued to outperform as hopes for higher metal prices persisted. But that was offset by weakness in consumer companies such as food and beverage retailers and cinema operators.