Global Fundamental Analysis 13/07/2020

OPENING CALL: The Australian share market is expected to open higher. SPI Futures contract expected to open 95 points higher


The Shanghai Composite rose for eight consecutive trading days through Thursday, climbing 16.5% over that stretch-the largest eight-day percentage gain since May 2008 and the biggest eight-day point gain since June 2015, according to Dow Jones Market Data.

Overnight Summary



Australian Market

Australia’s benchmark S&P/ASX index closed 0.6% lower at 5919.2, completing a 2.3% weekly drop as the country more than halved the number of international arrivals amid a rise in coronavirus cases. The S&P/ASX index followed the S&P 500 lower at the open, but recouped losses by lunchtime before a selloff when Australia’s government announced the slowdown in returning residents and citizens.


US Market

U.S. stocks climbed as investors brushed off worries about a fresh wave of coronavirus infections and its impact on the economic recovery. The Dow Jones Industrial Average advanced 369 points, or 1.4%. The S&P 500 rose 1.05%, and the technology-heavy Nasdaq Composite ticked up 0.7%. All three indexes notched gains for the week. So far, investors have largely dismissed concerns about the impact of a fresh wave of Covid-19 infections. New coronavirus cases in the U.S. repeatedly hit fresh records this week.



Gold futures ended lower, but held ground above $1,800 an ounce to score a fifth consecutive weekly gain as the spread of coronavirus in many U.S. states and other countries raised the need to hedge against risk.


Oil Futures

U.S. benchmark oil prices ended the session 2.3% higher at $40.55 a barrel as a surge in U.S. stock markets helped increase risk appetite in commodity markets, while another drop in the U.S. oil-rig count boosted hopes for tighter supplies down the road.



Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1255 to highs near US$1.1325 and was near US$1.1300 at the US close. The Aussie dollar rose from lows near US69.25 cents to highs near US69.70 cents and was near US69.50 cents at the US close. The Japanese yen held between 106.60 yen per US dollar and JPY106.95 and was near JPY 106.90 at the US close.


European Markets

European sharemarkets closed higher on Friday. Investors focussed on encouraging industrial output data in Italy and France rather than a spike in coronavirus cases across the globe. Italian shares led the way, up 1.3%. Banks, autos and food & beverage
stocks rose the most. The pan-European STOXX 600 index rose by 0.9%. The UK FTSE index gained 0.8%. And the German Dax rose by 1.2%. In London trade shares in Rio Tinto rose 0.1% while shares in BHP rose by 0.3%


Asian Markets

Meanwhile, a streak of stock market gains in China ended Friday, with the Shanghai Composite Index closing nearly 2% lower. It had risen 16.5% over eight straight sessions of gains, the biggest eight-day percentage gain since March 2008, according to Dow Jones Market Data. Japanese stocks closed broadly lower with real estate and financial stocks falling sharply on continuing concerns about a slow recovery from the Covid-19 pandemic. The Nikkei Stock Average dropped 1.1% to 22290.81.

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