Opening Call: The Australian share market is to open lower.
U.S. stocks, led by tech, fell amid decisions from central banks. The yield on the 10-year Treasury note fell to 1.42% from 1.46% Wednesday. The WSJ Dollar Index fell 0.30% to 89.93. Oil futures rose to a three-week high as U.S. crude supplies declined and Russia-Ukraine tensions rose. And gold futures rallied to a more than three-week high.
Australia’s S&P/ASX 200 index closed 0.4% lower, weighed by commodity stocks and biopharmaceutical company CSL. Despite a positive lead by U.S. shares and better-than-expected local employment data, the benchmark closed at its lowest level in eight sessions. The energy sector dropped 1.2% and materials edged 0.3% lower but health was the biggest loser, shedding 5.1% as CSL emerged from a trading halt. The stock shed 8.2% after completing its A$6.3 billion institutional placement. The financial sector was flat, while gains by WiseTech, Appen and Altium helped the tech sector add 2.1%. The ASX 200 is down 0.8% so far this week.
Major U.S. stock indexes fell after major central banks around the world took steps to tighten monetary policy, reversing some of their big gains from the prior session. The S&P 500 fell around 0.9%, with losses accelerating in the late afternoon. The Nasdaq Composite shed roughly 2.5% as tech stocks lagged behind the broader market. The Dow Jones Industrial Average dropped about 0.1%. Some analysts said that the prospect of higher interest rates has made growth stocks less attractive.
Gold futures rallied as the U.S. dollar slipped, helping lift prices to their highest finish in more than three weeks, a day after the Federal Reserve’s policy update. February gold rose 1.9% to settle at $1,798.20 an ounce after touching an intraday high of $1,800.60. The settlement was the highest for a most-active contract since Nov. 22, according to FactSet data. “With the FOMC only fractionally more hawkish than the markets had been expecting, gold took the results in its stride,” said Rhona O’Connell, head of market analysis, EMEA and Asia regions at StoneX, in a note.
Oil futures rose, with U.S. prices settling at a roughly three-week high as investors shook off worries about the Omicron variant of the coronavirus after upbeat data on U.S. inventories and implied demand. West Texas Intermediate crude for January delivery rose 2.1% to settle at $72.38 a barrel on the New York Mercantile Exchange, the highest finish for a front-month contract since Nov. 24, according to Dow Jones Market Data. February Brent crude, the global benchmark, added 1.5% at $75.02 a barrel on ICE Futures Europe.
Major currencies were mostly stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1285 to highs near US$1.1360 and was near US$1.1330 in afternoon US
trade. The Aussie dollar lifted from lows near US71.50 cents to highs near US72.20 cents and was near US71.80 cents in afternoon US trade. And the Japanese yen lifted from 114.20 yen per US dollar to JPY113.55 and was near JPY113.65 in afternoon US trade.
European sharemarkets rose on Thursday. Banks, miners and the healthcare sector drove gains. The pan-European STOXX 600 index lifted 1.2%. The German Dax index gained 1.0%. And the UK FTSE index rose by 1.3%. In London trade, shares in Rio Tinto rose 2.9% with BHP up 2.0%.
Japan’s Nikkei Stock Average ended 2.1% higher, led by gains in electronics and auto stocks, as the Federal Reserve’s signal for earlier rate increases weakened the yen. Chinese shares closed higher, with sentiment in Asian markets supported by the Fed’s decision to speed up its tapering. The Shanghai Composite Index was 0.8% higher, the Shenzhen Composite Index rose 0.6% and the ChiNext Price Index gained 0.7%. Energy stocks led gains, driven by signs of support from the government as it seeks to stave off fuel shortages over the winter.