Opening Call: The Australian share market is to open higher.
U.S. stocks had mixed results as Covid-19 cases continued to climb. The yield on the 10-year Treasury ticked higher to 0.95%. The WSJ Dollar Index slipped to 87.47. Oil prices rose amid forecasts for bullish storage data. Gold prices also rose, recouping some of yesterday’s severe losses.
Australia’s S&P/ASX 200 index climbed 0.7%, closing at a more than eight-month high, despite giving away much of its early gains. Big gains by the energy, financial and industrial sectors offset drops in tech and consumer stocks, while gold miners fell away as investors adopted a more risk-on mindset.
U.S. stocks ended mixed, with elevated Covid-19 infection levels, muted stimulus expectations and caution about the timing of vaccines tempering the exuberance that left major indexes hovering near record highs one day earlier.
The Dow Jones Industrial Average rose 0.9%, while the S&P 500 edged down 0.1%. The Nasdaq Composite fell 1.4%, pulling back for a second consecutive day.
Many investors said the stock market rally was likely overdone because the pandemic is far from over and questions remain about how quickly any vaccines may become available.
Gold futures settled higher, with the precious metal logging a partial recovery a day after suffering the sharpest daily drop in seven years.
December gold rose $22, or 1.2%, to settle at $1,876.40 an ounce, a day after tumbling 5%.
U.S. benchmark oil prices ended higher for a second straight session, closing with a 2.7% gain to $41.36 a barrel.
Investors expect that weekly U.S. oil inventory data will be bullish, and hopes remain high for a coronavirus vaccine.
Major currencies eased against the US dollar in European and US trade. The Euro fell from highs near US$1.1841 to lows near US$1.1778 and was near US$1.1805 at the US close. The Aussie dollar fell from highs near US72.92 cents to lows near US72.52 cents and was near US72.80 cents at the US close. And the Japanese yen fell from 104.90 yen per US dollar to JPY105.47 and was near JPY105.30 at the US close.
European sharemarkets held near 8-month highs on Tuesday with the pan-European STOXX 600 index up 0.9%. Shares of shopping mall owner Unibail-Rodamco-Westfield surged 21% after shareholders rejected a planned rights issue. The German ZEW survey of investors’ economic sentiment fell from 56.1 to 39 in November (survey: 41.7). Germany’s Dax index rose 0.5%. And the UK FTSE index added 1.8% with London-listed shares in Rio Tinto (+3%) and BHP (+2%) both up.
Earlier Tuesday, China’s major stock benchmarks closed lower, as companies along the electric-vehicle supply chains pared recent gains. The Shanghai Composite Index closed 0.4% lower, while the Shenzhen Composite Index shed 1.1% and the ChiNext Price Index ended 1.5% lower.
Hong Kong’s Hang Seng Index closed 1.1% higher as a rally in oil and real-estate stocks more than offset a sharp retreat in tech.
Japan’s Nikkei Stock Average trimmed some of its morning gains to close 0.3% higher, helped by news of a possible Covid-19 vaccine. Insurance stocks were among the best performers.