OPENING CALL: The Australian share market is to open higher.
U.S. stocks rebounded strongly after stimulus talks in the U.S. seemed back on track after Trump eased up on his opposition to them. The yield on the 10-year Treasury ticked higher to 0.79%. The WSJ Dollar Index fell to 88.69. Oil prices fell on demand fears. Gold prices fell due to the risk-on sentiment.
Australian shares rose 1.3%, closing above 6000 for the first time in nearly a month as investors digested the implications of the federal government budget. The benchmark S&P/ASX 200 index recovered from a brief early dip, advancing steadily throughout the session.
U.S. stocks climbed after President Trump appeared to soften his stance on a further stimulus package for American households, airlines and small businesses.
The Dow Jones Industrial Average rose 1.9%, as of the 4 p.m. close of trading in New York. The S&P 500 gained 1.7%.
Gold futures ended at their lowest in just over a week, stretching the prior day’s losses amid tumultuous stimulus talks in the U.S.
December gold dropped $18, or 0.9%, to settle at $1,890.80 an ounce. That was the lowest most-active contract settlement since Sept. 28, according to FactSet data.
U.S. benchmark oil prices fell 1.8% to $39.95 a barrel as energy markets worried Trump’s decision to delay any coronavirus stimulus package will corrode oil and fuel demand.
Traders say oil markets are less forward-looking than stock markets, and were therefore more concerned about the immediate impact to demand of another stimulus package delay.
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1730 to highs near US$1.1780 and was near US$1.1760 at the US close. The Aussie dollar held between US71.17 cents and US71.51 cents and was near US71.35 cents at the US close. And the Japanese yen eased from 105.70 yen per US dollar to JPY106.10 and was near JPY106.03 at the US close.
European sharemarkets were mixed on Wednesday. The panEuropean STOXX 600 index fell for the first time in five days, down by 0.1%. Healthcare lost 0.8% with telecom, media and real estate sectors also weaker. Miners rose after JP Morgan took an “extreme overweight” position on the sector. Shares in Deutsche Post rose 3.9% after it expected “exceptionally strong” business up to Christmas. The German Dax index rose by 0.2%. But the UK FTSE index lost 0.1%. In London trade, shares of Rio Tinto rose by 2.4% while BHP shares gained 2%.
Earlier Wednesday, Japan’s Nikkei Stock Average was little changed by the end of the session, as losses in pharmaceutical stocks offset gains in e-commerce and telecom stocks. Prime Minister Yoshihide Suga’s regulatory changes are being closely watched.
Mainland China’s markets were closed in observance of a national holiday. Hong Kong shares ended the day 1.1% higher as the market climbed for the fourth straight session.