Global Fundamental Analysis 17/03/2020

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open 209 points down.


U.S. airlines are in talks with the government to obtain as much as $50 billion in financial assistance as the coronavirus pandemic to hit flight bookings, according to
people briefed on the discussions.


The Federal Reserve lowered its benchmark interest rate to a range of 0% to 0.25% and said it would buy $700 billion in Treasury and mortgage-backed securities in an
aggressive bid to prevent market disruptions from aggravating what is likely to be a severe slowdown from the coronavirus pandemic.


Overnight Summary




Australian Market

The Australian share market fell by a record 9.7% after the U.S. Fed slashed interest rates. Every sector was sold off as the benchmark S&P/ASX 200 index ended the session at 5002.0, a drop of 30% from February 20th’s record close of 7162.5.

The fall beat the Oct. 10, 2008 record of an 8.3% decline and marked the third time in six sessions the market has fallen by more than 7.0%.
Star Entertainment Group was the worst performer, slumping 24% after the casino operator said it would close gambling machines to distance patrons from each other.


US Market

U.S. stocks dropped sharply intraday even after the Federal Reserve slashed its benchmark interest rate to near zero, reflecting investors’ concerns that the emergency
measures may not be enough to ward off a coronavirus-induced recession.

The Dow Jones Industrial Average slid 9.3% in afternoon trading, a decline of 2,199
points. The S&P 500 dropped 8.7%, and the tech-heavy Nasdaq Composite lost 9%. All three major indexes have plummeted into bear-market territory, with the S&P 500 off 27% from its mid-February high.

The declines underscore the level of panic among investors since the coronavirus pandemic began escalating, while disrupting supply chains, sidelining workers and
infecting tens of thousands of people. To combat the potential economic fallout, central banks and governments have put in place various stimulus measures. Those efforts, so far, have yet to stem the stock-market selloff.



Gold futures fell to settle at their lowest since December, and silver futures finished at their worst level in over a decade, as the Federal Reserve’s emergency decision to
slash interest rates failed to stem losses in the stock market, sending traders scrambling for cash.

Gold for April delivery on Comex lost $30.20, or 2%, to settle at $1,486.50 an ounce–the lowest finish for a most-active contract since Dec. 20, according to FactSet
data. Prices had dropped by more than 4% from Friday’s settlement to touch an intraday low at $1,450.90.


Oil Futures

U.S. benchmark oil prices ended the session down 9.5%, or $3.03, at $28.70/bbl., the lowest closing price since February 2016 as the coronavirus continues to spread around the globe, bringing transportation in some parts of Europe and the U.S. to a near-standstill, and forcing schools and businesses to close.

Brent crude oil fell below $30 a barrel and was down 12% at $29.78 a barrel on the day, extending its 2020 fall to 55%.



The euro rose against the dollar after the U.S. Federal Reserve announced a second emergency interest rate cut of 100 basis points and plans to buy $700 billion in Treasury and mortgage-backed securities.
EUR/USD rose 0.7% to 1.1182, as the dollar index fell 0.9% and USD/JPY jumped 1.3% to 106.58.


European Markets

European stocks closed firmly in the red but pared earlier losses. The Stoxx Europe 600 dropped 4.9%, the CAC-40 was down 5.7%, the DAX retreated 5.3% and the FTSE 100 fell 4.7%.


Asian Markets

China stocks reversed opening gains to end sharply lower on weak domestic economic data and anxiety over the global spread of the coronavirus pandemic. The benchmark Shanghai Composite Index declined 3.4% to 2789.25, its fourth consecutive session to close lower.

Hong Kong stocks fell sharply as selloffs triggered by the global spread of the coronavirus continue to create havoc in markets. The Hang Seng Index shed 4.0% to close
at 23063.57, the lowest closing level since January 2017.

Japan’s Nikkei Stock Average fell 2.5% to 17002.04, its lowest closing level since November 2016, due to persistent concerns about the coronavirus pandemic. Bank of Japan’s boosting of stock and corporate-debt purchases briefly lifted the Nikkei as much as 2.0% during the session, but the gains didn’t last.

Indian shares tumbled, with the benchmark Sensex ending 8.0% lower at 31390.07 after the U.S. Fed slashed its benchmark interest rate to near zero.
South Korean stocks dived to a new eight-year closing low, as fears of the economic fallout from the coronavirus pandemic outweighed hopes for more global stimulus. The
benchmark Kospi fell 3.2% to close at 1714.86–its lowest closing level since October 2011.

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - database | Page ID - 21909

Get instant Updates in Telegram