Global Fundamental Analysis 18/03/2020

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open 7 points down.


The Trump administration said it backs a plan to send checks directly to Americans, as part of a $1 trillion stimulus plan to help households and businesses hit by the sudden economic slowdown triggered by the coronavirus pandemic.


Overnight Summary




Australian Market

The ASX 200 has recovered some of its recent losses, as the session ended up 5.8 per cent higher at 5,293 points. This was one of the largest one-day percentage gain since 1997. The major miners and bank stocks helped lift the market, with BHP shares rising nearly 12 per cent and Commonwealth Bank shares gaining 13.3 per cent. However, the ASX 200 has still lost 26 per cent since its peak on February 20.


US Market

U.S. stocks jumped after a punishing selloff Monday as the Federal Reserve and White House moved to soften the economic blow of the coronavirus pandemic.
The S&P 500 climbed 6%, and the Nasdaq Composite advanced 6.2%, as of the close of trading in New York. The Dow Jones Industrial Average rose 5.2%, or 1,049 points, to 21237 after it dipped below the 20,000 mark at one point in the morning. On Monday, the blue-chip gauge recorded its second-worst percentage drop ever, behind only the Black Monday crash of 1987, amid fears the pandemic was disrupting supply chains and sidelining workers after infecting tens of thousands of people.

Even with the gains, major indexes remain deep in the red over the past month, with the S&P 500 down 27% in that time.
The market’s gains solidified after the Federal Reserve said it would launch a lending facility to support short-term commercial debt markets. The move is aimed at reassuring companies that they will have access to short-term funds, which could help banks to lend longer-term.



Gold prices finished higher for the first time in six sessions, with gains for the metal coinciding with an announcement that the Federal Reserve was establishing a
lending facility to assist U.S. corporations in rolling over short-term debt, a key area of the market that had frozen during the coronavirus pandemic.


Oil Futures

Oil futures extended losses from a day earlier to mark another finish at their lowest since 2016.  April West Texas Intermediate oil fell $1.75, or 6.1%, to settle $26.95 a barrel on the New York Mercantile Exchange. That was the lowest front-month contract settlement since February 2016, according to FactSet data.



The U.S. dollar surged against major currencies as stress in the market for dollar funding outside the U.S. worsened before the Federal Reserve stepped in on Tuesday to boost support for the short-term money market.

The dollar rose against most currencies, an unusual flight that is normally only seen in the most stressful market periods. It climbed more than 1% against the euro and
British pound.


European Markets

European sharemarkets rebounded on Tuesday. Driving the gains was a 200-billion euro stimulus plan by the Spanish government. Spain’s Ibex 35 share index rose by 6.4%. Across Europe the best performing sector was telecoms, up by 10% with utilities up 5.5%. But travel & leisure lost 5.4%. The pan-European
STOXX 600 index rose by 2.3%. The German Dax lifted by 2.3%; the UK FTSE rose by 2.8%. In London trade, shares of Rio Tinto rose by 1.1% while BHP rose by 8.0%.


Asian Markets

Earlier in the day in Asia, Japanese stocks ended higher after a volatile session, recovering from Monday’s closing which was the lowest in three years amid concerns about
the coronavirus pandemic.

South Korean stocks fell to an eight-year closing low after a five-session losing streak fueled by the coronavirus pandemic. The benchmark Kospi lost 2.5% to close at
1672.44, the lowest since October 2011. Chemical, auto, refiner and tech stocks led the declines.

China stocks ended the session mixed. The benchmark Shanghai Composite Index ticked down 0.3% to 2779.64, while the startup-heavy ChiNext Price Index pared early gains to close 0.4% higher.

India’s benchmark Sensex reversed early gains to end 2.6% lower at 30579.09. Investors will likely keep an eye on any coronavirus-related developments following
comments by the RBI governor that the coronavirus pandemic could affect India’s growth momentum.

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Source - database | Page ID - 21929

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