Opening Call: The Australian share market is to open higher.
U.S. stocks finished mixed after release of Federal Reserve minutes. The yield on the 10-year Treasury note was nearly unchanged at 2.03% versus 2.04% Tuesday. The WSJ Dollar Index fell 0.23% to 89.60. U.S. oil prices pushed higher and gold prices settled at eight-month highs as tensions over Ukraine resurfaced.
Australia’s S&P/ASX 200 index closed 1.1% higher as health stocks surged. The health sector gained 6.2% as imaging company Pro Medicus added 3.6% following its first-half results. Consumer and tech stocks gained, but the materials sector gave up 0.4%.
U.S. stocks ended mixed as investors parsed minutes of the most recent meeting of the Federal Reserve. The S&P 500 rose 0.1%, while the Nasdaq Composite Index lost 0.1% after being down more than 1% earlier in the session. The Dow Jones Industrial Average fell 0.2%.
Fed officials at their meeting last month talked about stepping up their timetable for raising interest rates beginning with an anticipated increase in March, amid greater discomfort with high inflation. While the minutes didn’t appear to differ from the Fed’s public comments, the market seemed to be relieved they didn’t show an even more hawkish bent, some analysts said.
The Nikkei Stock Average ended 2.2% higher, led by especially strong gains in chemical and electronics stocks as Russia-Ukraine geopolitical tensions eased. Bridgestone jumped 7.4% after projecting greater revenue and operating profit for 2022 and announcing a share buyback.
Gold futures posted their highest finish since June, rebounding from a loss in the previous session, as markets reacted to shifting headlines on the tensions between Russia and Ukraine. April gold rose 0.8% to settle at $1,871.50 an ounce. That’s the highest most-active contract finish since June 11, FactSet data show. The gain comes just a day after prices suffered their first loss in eight sessions.
“The geopolitical tensions surrounding Ukraine have been the latest catalyst to propel gold to fresh 2022 highs,” analysts at Sevens Report Research wrote in a newsletter. A NATO official said there are no signs of a Russian troop withdrawal near Ukraine, meaning an invasion by Russia might still be imminent, lifting the bullish case for bullion.
Oil futures rebounded as NATO’s chief said Russia’s military buildup around Ukraine continued, while Moscow said it continued to return troops and equipment to bases. West Texas Intermediate crude for March delivery rose 2.8% to $94.63 a barrel on the New York Mercantile Exchange.
April Brent crude, the global benchmark, was up 2.7% at $95.77 a barrel on ICE Futures Europe. The driver of oil prices going forward will continue to be the situation in Ukraine, said Tariq Zahir, managing member at Tyche Capital Advisors.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1346 to highs near US$1.1394 and was near US$1.1380 at the US close. The Aussie dollar rose from lows near US71.50 cents to highs near US72.05 cents and was near US72.00 cents at the US close. And the Japanese yen rose from near 115.76 yen per US dollar to JPY115.36 and was near JPY115.45 at the US close.
European sharemarkets were mixed on Wednesday. The panEuropean STOXX 600 index rose by less than 0.1% and the German Dax index fell by 0.3%. The UK FTSE index lost 0.1% after the annual rate of UK consumer price inflation rose to 5.5% in January, the highest since March 1992 (survey: +5.4%). In London trade, shares in Rio Tinto rose by 1.1% and BHP gained 1.9%.
Chinese shares closed higher amid broad gains in other Asian equities, as Ukraine-Russia tensions eased. The Shanghai Composite Index ended 0.6% higher, the Shenzhen Composite Index rose 0.6% and the ChiNext Price Index gained 0.1%.
Auto stocks were among the best performers, with Great Wall Motor advancing 1.6%, while BYD and SAIC Motor gained 1.0% each. Energy companies were mixed amid news that the chief of the International Energy Agency has called on OPEC+ to increase production.