Global Fundamental Analysis 05/01/2021

Global Fundamental Analysis 05/01/2021, FP Markets

Opening Call: The Australian share market is to open lower.


U.S. stocks fell to start the year as Covid continues to weigh. The yield on the 10-year Treasury was flat at 0.92%. The dollar was little changed. Oil prices fell after OPEC+ failed to agree on an output plan, signalling a possible build in production. Gold prices rose on the back of a relatively weak dollar.


Australian Market

Australia’s S&P/ASX 200 rose 1.5% to end at 6684.2, for its strongest start to a calendar year in two decades. All 12 sectors of the ASX 200 rose as the benchmark index recorded its best year-opening session since adding 1.7% in 2001. Materials led the way with a 2.4% gain.


US Market

U.S. stocks tumbled on the first trading day of the year, retreating sharply from records set just days ago.

The Dow Jones Industrial Average fell as many as 725 points before recovering a bit to trade 1.3% lower. The S&P 500 and the Nasdaq Composite both declined 1.5%.

Investors are starting off the new year fixated on the same issue that dominated markets for much of 2020: the coronavirus pandemic. Many believe economic activity will be able to pick up later this year as more of the population is vaccinated and businesses are able to reopen. But they acknowledge the path to recovery will likely be long and uneven.

News on the pandemic front has painted a grim picture in recent days. Hospitalizations in the U.S. jumped to a record Sunday. Meanwhile, governments across Europe are extending lockdowns to try to slow the spread of the virus.



Gold futures rose by nearly 3% to start the new year, after putting in the best annual return in a decade, with the move for bullion to its highest finish since November coming as the dollar traded around a 2 1/2-year nadir.

Gold futures for February delivery advanced 2.7% to settle at $1,946.60 an ounce.


Oil Futures

Oil futures finished lower after the Organization of the Petroleum Exporting Countries and its allies failed to reach an agreement on production policy and said they would reconvene their meeting on Tuesday.

The majority of the group of producers, known as OPEC+, favour a rollover of current output levels, but Russia and Kazakhstan want to see an increase of 500,000 barrels per day in February, according to a tweet from Amena Bakr, deputy bureau chief and chief OPEC correspondent at Energy Intelligence.

West Texas Intermediate crude for February delivery fell nearly 1.9% to settle at $47.62 a barrel on the New York Mercantile Exchange. March Brent crude declined by 1.4% to $51.09 a barrel on ICE Futures Europe.



Major currencies eased from highs against the US dollar in European and US trade. The Euro fell from highs near US$1.2305 to lows near US$1.2245 and was near these lows in late US trade. The
The Aussie dollar fell from highs near US77.40 cents to lows near US76.40 cents and was near US76.60 cents in late US trade. And the Japanese yen eased from near 102.70 yen per US dollar to JPY103.23 and was near JPY103.14 in late US trade.


European Markets

European sharemarkets lifted on Monday. The conclusion of the Brexit trade deal and roll-out of the Covid-19 vaccines drove optimism. Also, the German purchasing manager index for manufacturing rose from 57.8 to 58.3 in December. Shares in Entain, the owner of the betting firm, Ladbrokes, rose 25.3% after it confirmed an $11 billion bid proposal from US casino operator MGM Resorts. The pan-European STOXX 600 index rose by 0.7%. The UK FTSE lifted by 1.7% while the German Dax index edged up by 0.1%. In London trade shares in Rio Tinto rose by 5.2% and shares in BHP gained 5.7%.


Asian Markets

Earlier, China’s major stock benchmarks posted solid gains on the first trading day of 2021, with the startup-heavy ChiNext Price Index rising to a multiyear high. The Shanghai Composite Index added 0.9% and the Shenzhen Composite Index climbed 2.5%. ChiNext closed 3.8% higher, partly driven by a surge in electric-vehicle battery maker Contemporary Amperex Technology.

Hong Kong’s Hang Seng Index closed 0.9% higher at 27472.81 on the first trading day of The gains in Hong Kong tracked the strong performance by A-shares in their 2021 debut, which analysts attribute to the Chinese economy’s improving fundamentals and a relatively stable geopolitical situation.

Japanese stocks end lower, dragged by transportation and real-estate stocks after Prime Minister Yoshihide Suga said the government was considering declaring a state of emergency to contain the Covid-19 pandemic.

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Source - database | Page ID - 21697

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