Opening Call: The Australian share market is to open higher.
U.S. stocks climbed after the recent market pullback. The 10-year Treasury note yield edged higher at 1.30%, compared with 1.28% on Tuesday. The WSJ Dollar Index fell 0.21% to 87.12. U.S. oil prices settled at their highest since July as U.S. crude supplies fell a sixth-straight week. Gold futures ended lower after back-to-back session gains.
Australia’s S&P/ASX 200 index closed 0.3% lower, snapping a three-day winning streak on losses by commodity and financial stocks. The energy sector lost 2.2%.
Stocks rose, staging a rebound as investors tried to gauge the strength of the economic recovery. The S&P 500 rose about 0.9%. The energy was the best-performing sector of the S&P 500, boosted by the oil rally. The broad stocks gauge on Tuesday fell for the sixth time in seven trading days. It finished Wednesday roughly 1.3% below the all-time closing high it notched in early September.
The Dow Jones Industrial Average gained 0.7%, while the technology-focused Nasdaq Composite climbed 0.8%. Stocks have retreated in September, with some investors worried that markets are ripe for a pullback after marching higher for much of the year. The Dow is down about 1.5% since the start of the month.
Gold futures posted their first loss in three sessions, giving back almost all of the Tuesday gains that lifted prices to their highest settlement in nearly two weeks. Gold for December delivery fell 0.7% to settle at $1,794.80 an ounce. “Taper uncertainty is the single most important factor for gold, and unless and until we don’t get any clarity on this, gold prices are likely to remain in a consolidation zone,” said Naeem Aslam, chief market analyst at AvaTrade.
Oil futures climbed to their highest settlement since late July, after U.S. government data showed a more than six million-barrel weekly drop in domestic crude supplies, marking a sixth-consecutive weekly decline. West Texas Intermediate crude for October delivery on the New York Mercantile Exchange rose about 3.1% to settle at $72.61 a barrel.
November Brent crude, the global benchmark, climbed 2.5% to $75.46 a barrel on ICE Futures Europe. “For another week, stymied production and subdued refinery runs have offset each other – with both barely ticking higher in the last week as the U.S. Gulf Coast struggles to recover from the impact of Hurricane Ida,” said Matt Smith, lead oil analyst, Americas, at Kpler.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1799 to highs near US$1.1832 and was near US$1.1815 at the US close. The Aussie dollar lifted from lows near US73.07 cents to highs near US73.36 cents and was near US73.30 cents at the US close. And the Japanese yen rose from 109.57 yen per US dollar to JPY109.11 and was near JPY109.35 at the US close.
European share markets slipped on Wednesday with the pan-European Stoxx 600 index down by 0.8%. Utility stocks tumbled 2.9%, with Europe’s biggest utility Enel falling 5.5% after the Spanish government’s move to cap energy bills. The German Dax index lost 0.7% and the UK FTSE index fell by 0.3%. In London trade, shares in Rio Tinto rose by 0.8% and shares in BHP lifted by 0.5%.
Japan’s Nikkei Stock Average closed broadly lower as profit-taking kicked in following the benchmark Nikkei’s ascent to a 31-year high on Tuesday. The index closed down 0.5%. Among the biggest losers was SoftBank Group, which fell 5.8% amid continuing concerns about the valuation of its Chinese portfolio companies.
Chinese stocks finished lower, dragged by consumer-related and property sectors, while lithium producers gained. Chinese economic activity data in August showed that on-year retail sales growth slowed to 2.5% from 8.5% in July, and home sales by value slumped 19.7%, the biggest drop since April 2020. The Shanghai Composite Index slipped 0.2%, the Shenzhen Composite Index edged 0.1% lower, and the ChiNext Price Index ended 1.1% lower.