Global Fundamental Analysis 17/03/2021

Global Fundamental Analysis 17/03/2021, FP Markets

Opening Call: The Australian share market is to open lower.


U.S. stocks ended the day mostly lower after an early tech rally fizzled. The yield on the 10-year Treasury ticked higher to 1.62%, despite good demand at an auction for government debt.

The WSJ Dollar Index edged higher to 86.6. Oil prices fell further as investors predicted another build in U.S. inventories. Gold prices edged higher ahead of a Fed meeting later this week.


Australian Market

Australia’s S&P/ASX 200 closed 0.8% higher as every sector rose except for energy and materials, which were hit by lower commodity prices. Tech stocks led gains, following a positive lead from Wall Street.


US Market

Most major U.S. stock indexes dropped, as an early rally in tech shares lost steam ahead of the closing bell.  

The tech-heavy Nasdaq Composite was up 0.1% as of the 4 p.m. close of trading in New York, after having been up as much as 1.2% earlier in the day.  

The Dow Jones Industrial Average fell 0.4%, while the broad-based S&P 500 retreated 0.2%, a day after both indexes closed at records.  

The tech-heavy Nasdaq gave up early gains as government bond yields jumped. In recent weeks a selloff in U.S. Treasurys has pushed yields higher, increasing the appeal of bonds to investors and reducing the relative attractiveness of shares of tech and other fast-growing companies.  

Seven of the S&P 500’s 11 sectors were in negative territory, with energy stocks performing the worst, weighed down by a decline in oil prices.



Gold futures climbed to settle at a two-week high, finding support ahead of the outcome of a two-day Federal Reserve meeting that’s expected to see policymakers reiterate their current policy stance.  

Prices for the precious metal also rose in the wake of data that revealed that sales at U.S. retailers in February fell 3% due to a lapse in government aid and unusually bad weather.

Industrial production also fell last month by 2.2% versus Wall Street expectations for a gain of 0.5%. Gold for April delivery tacked on 0.1% to settle at $1,730.90 an ounce on Comex.


Oil Futures

Oil futures marked a third straight decline, with U.S. benchmark crude trading below later-dated futures, as traders bet that domestic crude supplies climbed for a fourth week in a row, in the wake of last month’s Texas deep freeze.  

West Texas Intermediate crude for April delivery fell 0.9% to settle at $64.80 a barrel on the New York Mercantile Exchange. The May WTI contract ended the session at $64.86 and has traded at a premium to the nearby month for three sessions, a condition is known as contango, which can encourage investors to put oil into storage for later sale.  

May Brent crude, the global benchmark, lost 0.7% at $68.39 a barrel on ICE Futures Europe.



Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1951 to lows near US$1.1882 and was near US$1.1905 at the US close. The Aussie dollar fell from highs near US77.56 cents to lows near US77.12 cents and was near US77.45 cents at the US close. But the Japanese yen rose from near 109.27 yen per US dollar to JPY108.77 yen and was near JPY109.00 at the US close.


European Markets

European sharemarkets rose on Tuesday. The pan-European STOXX 600 index closed up 0.9% with auto stocks lifting 2.1% to their highest level since June 2018. Volkswagen shares jumped 6.7% as it eyes cost cuts and an ambitious expansion into the electric vehicle market. The German Dax index gained 0.7%. The UK FTSE index lifted 0.8% with AstraZeneca shares 3.6% higher despite suspensions of its Covid-19 vaccine. In London trade, shares in Rio Tinto rose by 0.2%, but shares in BHP lost 0.5%.


Asian Markets

Earlier Tuesday, China’s major stock benchmarks advanced on gains led by real-estate companies and baijiu brewers. The Shanghai Composite Index added 0.8%, while the Shenzhen Composite Index and the ChiNext Price Index each rose by 1.1%. Property developers rallied, following several leading companies reporting strong 2020 earning results and recent property sales showing solid growth.  

Hong Kong’s Hang Seng Index closed 0.7% higher as tech stocks broadly rebounded from sharp falls Monday. Smartphone maker Xiaomi jumped 8.0%, surging for a second day after a court order blocked a U.S. investment ban on the stock.  

The Nikkei Stock Average rose 0.5% as gains in the airline and electronic stocks helped offset losses in financial and steel stocks. Among individual movers, Biotech company Euglena jumped 26% after the company said it had successfully produced bio-jet fuel derived from microalga, and planned to supply the fuel for flights within this year.

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