Opening Call: The Australian share market is to open lower.
U.S. stocks finished largely unchanged on a light day of trading. The yield on the 10-year Treasury note was little changed at 1.62% compared with 1.583% Friday. The WSJ Dollar Index rose 0.28% to 89.36. U.S. oil futures brushed aside fears of a possible Strategic Petroleum Reserve release to finish higher. And gold saw its first loss in eight sessions.
Australia’s S&P/ASX 200 index closed 0.4% higher, eking out gains despite weakness among commodity stocks. Health, consumer discretionary and tech were the best performing sectors. The energy sector tipped 0.2% lower.
U.S. stocks wavered to start the week, with investors parsing how companies might withstand inflation pressures. The indexes edged higher in early trading, then turned down later in the day. The S&P 500 was flat, the tech-focused Nasdaq Composite Index and the Dow Jones Industrial Average both finished less than 0.1% lower.
Despite price pressures that have lingered longer than many investors expected, the indexes are still close to record highs. Companies that have reported earnings so far have broadly beaten analysts’ expectations, supporting stock prices. Higher inflation has also suppressed the returns on government bonds, the main alternative to stocks.
Gold futures settled with a loss, halting a seven-session run of advances for the precious metal that has been buoyed by fears about post-Covid-19 inflation pressures. December gold edged down by 0.1% to settle at $1,866.60 an ounce, following a weekly advance of nearly 2.9%, representing the best such gain since the period ended May 7. Gold’s seven-day streak had been the longest for a most-active contract since a nine-day rise that ended on July 29, 2020, according to Dow Jones Market Data.
Oil futures finished on a mixed note, with global prices lower but the U.S. benchmark ending higher after shaking off losses earlier in the session tied to the possibility of a release of crude from the Strategic Petroleum Reserve.
West Texas Intermediate crude for December delivery tacked on 0.1% to settle at $80.88 a barrel on the New York Mercantile Exchange. January Brent crude, the global benchmark, lost nearly 0.2% to $82.05 a barrel on ICE Futures Europe.
Major currencies were mixed against the US dollar in European and US trade. The Euro fell from US$1.1460 to lows near US$1.1355 and was near US$1.1360 in afternoon US trade. The Aussie dollar rose from lows near US73.40 cents to highs near US73.70 cents and was near US73.45 cents in afternoon US trade. And the Japanese yen fell from 113.80 yen per US dollar to JPY114.18 and was near JPY114.13 in afternoon US trade.
European share markets were firmer on Monday. The sentiment was supported by European Central Bank chief Christine Lagarde who said that the inflation spike will last longer than originally thought, but would fade. But the basic resources index eased 1.1%. The pan-European STOXX 600 index rose by 0.4% to record highs. The German Dax index rose by 0.3%, also to record highs. And the UK FTSE index rose by 0.1%. In London trade shares in Rio Tinto fell by 1.1% and BHP shares fell by 1.9%.
Japanese stocks ended higher, led by auto stocks as recent earnings underscored a steady recovery from the Covid-19 pandemic. The Nikkei Stock Average added 0.6%. Chinese stocks ended the session lower, as property developers declined after fresh data showed China’s property-sector downturn continuing.
Chinese new home prices fell for the second consecutive month in October. Morgan Stanley said it expects near-term stock-price volatility for the property sector amid earnings headwinds. The Shanghai Composite Index and Shenzhen Composite Index each closed 0.2% lower while the ChiNext Price Index ended 0.8% lower.