Global Fundamental Analysis 08/12/2021

Global Fundamental Analysis 08/12/2021, FP Markets

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

U.S. stocks closed higher on Omicron optimism. The yield on the 10-year Treasury note rose to 1.47% from 1.43% Monday. The WSJ Dollar Index fell 0.11% to 90.14. U.S. oil futures settled above $70 for the first time in nearly two weeks. And gold futures marked their highest finish in more than a week.

Australian Market

Australia’s S&P/ASX 200 index closed 0.95% higher for its biggest gain in two months. The benchmark built on a positive lead from U.S. stocks, which rose amid easing fears about the seriousness of the Covid-19 Omicron variant. Nearly every sector finished higher, with health, tech and energy leading with gains of between 1.7% and 2.1%. The heavyweight materials and financial sectors put on 0.5% and 0.7%, respectively.


US Market

U.S. stock indexes rose sharply in hopes that Omicron would prove less damaging to the economy than feared. The S&P 500 gained 2.1%, building on Monday’s gains and recouping all its losses from last week. The tech-focused Nasdaq Composite Index jumped 3%, while the Dow Jones Industrial Average rose 1.4%.  

Hopes that the new Covid-19 strain will have a less-pronounced impact on travel and consumer confidence have bolstered stocks this week. Scientists and vaccine makers are still assessing the severity of Omicron and how well-existing vaccines may work against it.



Gold futures finished at their highest in more than a week, even as a rally in global stocks, an advance in Treasury yields, and a firming dollar helped to limit the precious metal’s upward move.  

February gold rose 0.3% to settle at $1,784.70 an ounce, after losing 0.3% on Monday. The settlement was the highest for a most-active contract since Nov. 26, FactSet data show.


Oil Futures

Crude-oil prices climbed, with U.S. prices settling above $70 a barrel for the first time in about two weeks, as concerns eased that the Omicron variant of the coronavirus will reduce demand over the winter.  

West Texas Intermediate crude for January delivery picked up 3.7% to settle at $71.40 a barrel on the New York Mercantile Exchange. Based on the front-month contract, the U.S. benchmark marked its highest value since Nov. 24, according to Dow Jones Market Data. February Brent crude, the global benchmark, rose 3.2% to end at $74.82 a barrel on ICE Futures Europe, for a fourth-straight gain. 



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1297 to lows near US$1.1230 and was near US$1.1265 at the US close. The Aussie
dollar rose from lows near US70.69 cents to highs near US71.22 cents and was near US71.20 cents at the US close. And the Japanese yen eased from 113.45 yen per US dollar to JPY113.77 and was near JPY113.55 at the US close.


European Markets

European share markets closed higher on Tuesday. The pan-European STOXX 600 index lifted 2.5% with technology shares up 5.6%. The German Dax index advanced 2.8% on reports that Volkswagen (+8.6%) is exploring a possible initial public offering (IPO) of its luxury brand Porsche (+8.5%). German industrial production lifted by 2.8% in October (survey: +1%). And the UK FTSE index climbed by 1.5%. London-listed shares in Rio Tinto (+4.8%) and BHP (+5.6%) both jumped as iron ore prices surged.


Asian Markets

Japan’s Nikkei Stock Average closed 1.9% higher, led by especially strong gains in railway and airlines stocks as some of the more severe concerns about the Omicron variant eased for now.  

Chinese stocks finished the session mixed, with gains in property developers meeting losses in liquor makers. Developers were boosted by greater support for the property sector, as China injected more liquidity into its financial system, Jefferies said.

Chinese liquor makers were among decliners, as weak consumer sentiment weighed, DBS Research said. The Shanghai Composite Index ended 0.2% higher, the Shenzhen Composite Index closed 0.7% lower and the ChiNext Price Index dropped 1.1%.

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