OPENING CALL: The Australian share market is to open lower.
U.S. stocks declined as the technology slide continued. The 10-year Treasury note yield fell 3.8 basis points to 0.683%, marking its biggest daily drop since Aug. 4, while the two-year note rate edged 0.8 basis point down to 0.141%. The WSJ Dollar Index was recently up 0.48% to 88.57. Crude oil prices ended at their lowest since June. Gold futures settled at their highest in nearly a week.
Australia’s S&P/ASX 200 index gained 1.1% to close at 6007.8, as business confidence rose slightly in NAB’s monthly business survey. The benchmark rallied at the open, as miners extended Monday’s gains, and nudged past the 6000 level through the day.
Big technology stocks pulled back for the third consecutive trading session, sparked by growing concerns that some of the stocks seen as beneficiaries of the coronavirus pandemic have climbed too far too quickly.
The tech-heavy Nasdaq Composite Index, which slumped more than 4%, entered correction territory. The S&P 500 fell 2.8%, and the Dow Jones Industrial Average lost 2.3%.
Gold futures reversed course to finish at their highest in nearly a week, with the haven metal finding support as global stocks sank and as the U.S. dollar eased back a bit from its earlier highs.
December gold rose $8.90, or 0.5%, to settle at $1,943.20 an ounce, after trading as low as $1,911.70. Prices for the most-active contract, which saw a 2.1% decline last week, marked its highest finish since Sept. 2, according to FactSet data.
Oil futures fell to their lowest settlement since June, unable to shake off worries about crude demand due to a continued rise in coronavirus cases globally, the end of U.S. summer holiday driving season and a report that Saudi Arabia plans to cut its oil prices in October.
The U.S. benchmark, West Texas Intermediate crude for October delivery, fell $3.01, or 7.6%, to $36.76 a barrel on the New York Mercantile Exchange. November Brent crude, the global benchmark, lost $2.23, or 5.3%, at $39.78 a barrel on ICE Futures Europe, after a 1.5% decline on Monday, when U.S. markets were closed for Labor Day.
Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1826 to lows near US$1.1766 and was near US$1.1780 at the US close. The Aussie dollar fell from highs near US73.07 cents to lows near US72.10 cents and was near US72.15 cents at the US close. But the Japanese yen rose from 106.37 yen per US dollar to JPY105.86 and was near JPY106.00 at the US close.
European sharemarkets closed lower on Tuesday with the panEuropean STOXX 600 index down by 1.2%. The oil & gas sub-index tumbled 3.7% – its worst day in nearly 11 weeks – as oil prices plunged. The German Dax index slid 1%, despite a 4.7% lift in German exports in July. The UK FTSE index lost 0.1% after UK Prime Minister Boris Johnson vowed he “won’t back down” over sticking points in Brexit trade talks with the EU. In London trade, shares in Rio Tinto rose by 0.4%, but shares in BHP lost 0.5%.
Earlier in the day in Asia, the Nikkei Stock Average rose, led by gains in electronics and food stocks, thanks partly to continuing hopes for a recovery from the Covid-19 pandemic. The Nikkei Stock Average rose 0.8% to 23274.13.
Mainland China’s major stock benchmarks ended the session higher as the market recovered from recent declines. The benchmark Shanghai Composite Index gained 0.7% to settle at 3316.42, snapping a four-session run of losses that included its steepest decline in nearly two months on Monday. The Shenzhen Composite Index rose 0.4% to 2248.20, while the ChiNext Price Index added 0.4% to 2650.63.