Global Fundamental Analysis 12/10/2021

Global Fundamental Analysis 12/10/2021, FP Markets

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


U.S. stocks closed lower as crude oil rallied, with U.S. oil prices settling above $80 for the first time in almost seven years. The U.S. bond market was closed for the Columbus Day holiday. The WSJ Dollar Index rose 0.28% to 88.82. Gold futures ended lower, matching their longest string of losses in more than three weeks.


Australian Market

Australia’s S&P/ASX 200 index closed 0.3% lower, weighed by technology, health and gambling stocks. The health sector lost 1.3%. Star Entertainment was the worst-performing ASX 200 component, shedding 23% after allegations that it enabled criminal activity at its casinos.


US Market

U.S. stocks fell, while oil prices rallied. The S&P 500 retreated 0.7%, while the Dow Jones Industrial Average declined 0.7%. The technology-heavy Nasdaq Composite slipped 0.6%. Stocks rose in the morning but later turned lower as investors fretted about the combination of inflation and slowing growth. Inflation has proved stickier than expected, brought on by supply-chain disruptions, labour shortages and surging energy prices.



Gold futures settled with a loss for a third straight session, marking the longest period of declines for bullion in nearly a month and extending last week’s slump following a weaker-than-expected September jobs report.  

December gold fell by 0.1% to settle at $1,755.70 an ounce on Comex, though prices did spend some time trading higher to touch a high of $1,761.10. The settlement for the most active contract was the lowest since Sept. 29, FactSet data show. The drop matched the longest skid for the most active contract since a three-session period of declines ended Sept. 17.


Oil Futures

Oil futures settled above $80 a barrel for the first time in almost seven years, as a global energy crisis persisted, boosting crude demand. West Texas Intermediate crude for November delivery rose 1.5%, to settle at $80.52 a barrel on the New York Mercantile Exchange. That was the first finish for a front-month WTI contract above $80 a barrel and the highest settlement since Oct. 31, 2014, according to Dow Jones Market Data. December Brent crude, the global benchmark, added 1.5% a barrel on ICE Futures Europe, with prices logging the highest finish since Oct. 9, 2018.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1585 to lows near US$1.1548 and was near US$1.1550 at the US close. But the Aussie dollar rose from lows near US73.15 cents to highs near US73.72 cents and was near US73.45 cents at the US close. And the Japanese yen eased from 112.64 yen per US dollar to JPY113.41 and was near JPY113.40 at the US close.


European Markets

European sharemarkets were mixed on Monday. The pan European STOXX 600 index fell by 0.1% with travel and leisure shares down by 0.9%, while basic resources shares gained 3%. The German Dax index also eased 0.1%, but the UK FTSE index gained 0.7%. Shares of British banks HSBC, Lloyds and NatWest all rose over 2% after ‘hawkish’ comments from Bank of England officials drove more bets on a November interest rate hike. In London trade shares in Rio Tinto (+3.5%) and BHP (+3.2%) both advanced.


Asian Markets

Japanese stocks ended broadly higher, led by especially strong gains in auto and electronics stocks. The Nikkei Stock Average rose 1.6%. Chinese stocks ended the session lower, as the market continued to trade in a tight range after the weeklong National Day holidays. The benchmark Shanghai Composite Index edged down 0.46 points while the Shenzhen Composite Index fell 0.4% to 2403.46. The ChiNext Price Index was the worst performer, losing 1.4% to end at 3196.19. Power producers led the downturn as investors continue to worry about elevated coal costs, despite Beijing’s recent efforts to secure coal supplies and support electricity tariff increases.

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