Opening Call: The Australian share market is to open higher.
Stocks closed down as the GameStop frenzy continued. The 10-year Treasury note yield rose to 1.07%, from 1.055% Thursday. The WSJ Dollar Index was up 0.12% to 85.57. Crude oil ended lower for the session but ended the month more than 7% higher. Gold prices saw their first gain in seven sessions but ended lower for the month.
Australia’s S&P/ASX 200 index closed 0.6% lower, with banks, mining and energy stocks bearing much of the pain. Materials and financial sectors, which together account for almost half the ASX 200’s market capitalization, fell by 1.3% and 1.6%, respectively, despite positive leads from Wall Street. The ASX 200 index dropped 2.8% for the week, its biggest fall since October.
U.S. stocks ended lower as frenzied trading continued to drive GameStop and other heavily shorted shares, pointing to a volatile end to 2021’s first month of trading.
The Dow Jones Industrial Average fell 2% and the S&P 500 declined 1.9% — a day after rising nearly 1%. The tech-heavy Nasdaq Composite also lost 2%.
While the market has been fixated on the shorts vs. Reddit feud, investors shouldn’t be surprised by the market’s recent losses, observers said, given that it has been in a long upswing.
This week in fact represents the worst week for the major indexes since Oct. 30, before the election.
Gold futures ended higher, scoring their first gain in seven sessions but returned a loss for the month, even though investors focused on worries about rising speculation on Wall Street and the efficacy of Covid-19 vaccines.
April gold rose $9.10, or 0.5%, to settle at $1,846.70. It settled 0.4% lower on Thursday, marking gold’s sixth-straight day of declines, the longest skid for prices since the seven-session loss ended March 5, 2019, FactSet data show.
U.S. oil futures settled lower, weighed down by ongoing concerns over energy demand. But prices ended the month with a more than 7% gain, with Saudi Arabia set to implement a unilateral production cut of 1 million barrels a day starting in February.
March West Texas Intermediate crude fell 14 cents, or 0.3%, to settle at $52.17 a barrel on the New York Mercantile Exchange. March Brent crude, which expired at the end of the day’s session, rose 35 cents, or 0.6%, to end at $55.88 a barrel.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2085 to lows near US$1.2010 and was near US$1.2040 at the US close. The Aussie dollar fell from highs near US76.36 cents to lows near US75.64 cents and was near US76.05 cents at the US close. And the Japanese yen fell from near 104.85 yen per US dollar to JPY105.15 and was around JPY105.00 at the US close.
European sharemarkets advanced on Tuesday. The pan-European STOXX 600 index gained 1.3%. Shares of Danish health devices firm Coloplastclimbed 8.8%. The Eurozone economy, as measured by GDP, contracted by 0.7% in the December quarter (survey: -0.9%) for a 5.1 per cent annual decline. The German Dax index rose 1.6% and the UK FTSE index lifted 0.8%. But London-listed shares in Rio Tinto (-1.0%) and BHP (-0.6%) both fell.
The Nikkei Stock Average ended down 1.9% amid concerns over the rising number of coronavirus cases in Japan. Corporate earnings will continue to be closely watched. Utility stocks led the losses.
China’s major stock benchmarks slipped as concerns over further liquidity tightening by the central bank weighed on sentiment. The Shanghai Composite Index lost 0.6%, while the Shenzhen Composite Index fell 0.8% and the ChiNext Price Index slid 1.0%.