Global Fundamental Analysis 04/08/2021

Australian Market

Australia’s S&P/ASX 200 index closed 0.2% lower, retreating from a record amid falls by commodity and financial stocks. The benchmark followed the S&P 500 and DJIA lower despite strength in local tech stocks. The energy sector dropped 1.4% amid lower oil prices. The Reserve Bank of Australia said it still plans to reduce government bond buying even as the economic outlook deteriorates due to the Covid-19 lockdowns.

US Market

U.S. stocks rose, shrugging off a pullback in shares of technology and communications companies. The S&P 500 added 0.8%, erasing earlier losses. The Dow Jones Industrial Average rose 0.8% and the Nasdaq Composite edged up 0.5%. A solid earnings season has helped bolster investor optimism that stocks can continue to grind higher following an already strong rally this year. Money managers say continued support from central banks and economic data that still shows growth will further support equities.

Commodities

Gold futures finished lower as equity markets tilted higher and U.S. Treasury yields and the dollar edged up. December gold, the most active contract, closed 0.4% lower at $1,814.10 an ounce, following a 0.3% gain to start the week and the first session in August. The decline was also attributed to some consolidation of profits by investors after a run above $1,800 for the precious metal.

Oil Futures

Oil futures gave up early gains to finish lower, extending a sharp decline from the previous session — blamed on worries about the impact on demand from the spread of the Delta variant of the coronavirus that causes Covid-19.  

West Texas Intermediate crude for September delivery fell 1% to close at $70.56 a barrel on the New York Mercantile Exchange. October Brent crude, the global benchmark, declined 0.7%, ending at $72.41 a barrel on ICE Futures Europe.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro eased from highs near US$1.1890 to lows near US$1.1855 and was near US$1.1865 at the US close. The Aussie dollar held between US73.60 cents and US74.05 cents and was near US73.95 cents at the US close. And the Japanese yen rose from near 109.25 yen per US dollar to JPY108.87 and was near JPY109.05 at the US close.

European Markets

European sharemarkets advanced on Tuesday in response to positive earnings results. Shares in BP rose 5.6%, and lifting the oil & gas sector after the oil giant increased its dividend and boosted
share buybacks after its quarterly profit rose. Shares in Societe Generale rose by 6.4% after lifting its profit forecast for the full year. The pan-European STOXX 600 index lifted by 0.2% to record highs. But while the German Dax index eased by 0.1%, the UK FTSE gained 0.3%. In London trade, shares in Rio Tinto rose by 1.0% and BHP shares lifted by 0.7%.

Asian Markets

Japan’s Nikkei Stock Average fell amid persisting concerns over the resurgence of Covid-19 and the highly transmissible Delta variant in China and other parts of Asia. The Nikkei Stock Average finished 0.5% lower. The rise in Covid-19 cases and their geographical spread in mainland China is clearly spooking investors, Oanda said.  

Chinese stocks ended lower, as the commodities and auto sectors weighed. Automotive chip makers were sold off after a Chinese regulator vowed to clamp down on hoarding and price manipulation. The Shanghai Composite Index dropped 0.5% while the Shenzhen Composite Index and the ChiNext Price Index also each lost 0.5%.