Opening Call: The Australian share market is to open higher.
U.S. stocks were mostly lower to start the week, with only the Nasdaq Composite finishing higher. The yield on the 10-year Treasury edged higher to 1.57% ahead of Thursday’s inflation data. The WSJ Dollar Index fell to 85.1. Oil prices reversed early gains to finish lower amid worries about potentially increasing Iranian output. Gold prices were lifted by the dollar’s weakness.
Australia’s S&P/ASX 200 closed 0.2% lower, snapping the benchmark’s three-day run of record finishes. The ASX 200 opened higher, in line with futures after a positive lead from the U.S., but the index lost steam through the session amid a pullback by the financial sector, which is Australia’s largest by market capitalization.
The Dow Jones Industrial Average and the S&P 500 slipped after closing near record levels last week.
The Dow Jones Industrial Average lost 0.4%. The blue-chip index had briefly pushed into record territory after the opening bell before retreating.
The S&P 500 dropped less than 0.1% after the index reached its second-highest close in history on Friday. The technology-heavy Nasdaq Composite gained 0.5%.
Major U.S. stock indexes have been mostly muted in recent trading sessions, with investors assessing a range of factors including the economic outlook, supply-chain problems and high valuations for stocks. While inflation expectations have eased in recent days, investors remain on edge for signs that Federal Reserve officials may consider pulling back on easy-money policies that have supported longtime rally inequities.
Gold futures booked back-to-back gains, finding some support from a decline in the U.S. dollar, but prices finished below the key $1,900 for the third session in a row.
Gold futures for August delivery rose 0.4% to settle at $1,898.80 an ounce on Comex, after reaching intraday highs just under $1,900.
After the Comex settlement, however, prices in electronic trading inched up a bit further to surpass the $1,900 mark.
Oil futures slipped, turning south after the U.S. crude benchmark briefly touched the $70-a-barrel threshold for the first time in more than 2 1/2 years.
Prices took a directional cue from a fall in China’s crude-oil imports from a year ago, and as traders weighed the potential for an Iran nuclear deal that would likely lead to more oil in the world market.
West Texas Intermediate crude for July delivery fell 0.6% to settle at $69.23 a barrel on the New York Mercantile Exchange after hitting a session high of $70 in early action.
WTI last traded at $70 or above in October 2018, based on action for the most-active contracts, according to FactSet.
August Brent crude lost 0.6% to settle at $71.49 a barrel on ICE Futures Europe.
Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.2145 to highs near US$1.2200 and was near US$1.2190 at the US close. The
Aussie dollar lifted from lows near US77.25 cents to highs near US77.65 cents and was near US77.60 cents at the US close. And the Japanese yen rose from near 110 yen per US dollar to JPY109.20 and was near JPY109.25 at the US close.
European sharemarkets were mixed on Monday. Investors await the European Central Bank meeting later in the week. But across sectors, of note the automobiles and parts index rose 0.9% to reach its highest since March 2015, extending a 5.3% rally from last week. But miners fell 1.6% as weaker-than-expected growth in Chinese exports in May weighed on base metal prices. Oil & gas shares fell 0.3% in response to lower oil prices. The pan-European STOXX 600 index lifted by 0.2% to a new closing high. But the German Dax index lost 0.1%, while the UK FTSE index was up just 0.1%. In London trade shares in Rio Tinto fell by 1.3% while shares in BHP fell by 1.2%.
Earlier Monday, Chinese stocks finished mixed, as telecommunications companies’ gains were offset by losses in the new-energy sector. The Shanghai Composite Index rose 0.2%, the Shenzhen Composite Index gained 0.3%, while the ChiNext Price Index lost 0.4%.
Hong Kong stocks ended the session lower to extend a losing streak for the fourth straight trading day. The benchmark Hang Seng Index shed 0.5%.
Japanese stocks settled higher, led by gains in e-commerce, electronics and game stocks, as concerns about higher borrowing costs ease. The Nikkei Stock Average rose 0.3%. Covid-19 infection trends are being closely watched as the government takes steps to accelerate vaccinations.