Opening Call: The Australian share market is to open lower.
U.S. stocks closed lower after mixed earnings from major retailers. The yield on the 10-year Treasury note rose to 1.636% compared with 1.632% on Tuesday. The WSJ Dollar Index fell 0.14% to 89.55. U.S. oil futures fell to their lowest finish since early October as the Biden administration seeks ways to tamp down prices. And gold futures logged their highest settlement since June on inflation concerns.
Australia’s S&P/ASX 200 index closed 0.7% lower as Commonwealth Bank of Australia dragged the heavyweight financial sector into the red. Shares in Commonwealth, Australia’s largest listed company by market capitalization, lost 8.1% after warning of the margin impact of low-interest rates and fierce competition. NAB, Westpac and ANZ followed Commonwealth lower, losing between 1.1% and 2.0%.
U.S. stocks fell after earnings from big retailers like Target, TJX and Lowe’s. The S&P 500 slipped 0.3%, a reversal from Tuesday’s gains. The tech-focused Nasdaq Composite Index was down roughly 0.3%, and the Dow Jones Industrial Average slipped 0.6%.
Lowe’s shares added 0.4% after the company boosted its full-year sales guidance. TJX gained 5.8% after the retailer posted earnings that exceeded analysts’ expectations. But Target declined 4.7% after posting an earnings and revenue beat but missing on gross margin, And Visa shares fell 4.7% after Amazon.com said it would stop accepting Visa’s U.K. credit cards because of their high fees.
Gold futures settled higher after posting losses in each of the last two trading sessions, with inflation concerns supporting the precious metal. December gold rose 0.9% to settle at $1,870.20 an ounce, following price declines on Monday and Tuesday. That was the highest settlement for a most-active contract since June 11, FactSet data show.
Oil futures dropped to their lowest settlement since early October, as President Biden sought ways to lower the price of gasoline for U.S. consumers. West Texas Intermediate crude for December delivery fell 3% to settle at $78.36 a barrel on the New York Mercantile Exchange. That was the lowest front-month contract finish since Oct. 7, according to Dow Jones Market Data. January Brent crude, the global benchmark, lost 2.6% at $80.28 a barrel on ICE Futures Europe, the lowest since Oct. 1.
Reports that a joint release of crude supplies was discussed by Biden and Chinese leader Xi Jinping in a virtual meeting earlier this week led to sharp losses for oil Wednesday. Biden has also asked the Federal Trade Commission to investigate whether illegal conduct has led to the rise in retail gasoline prices.
Major currencies were mixed against the US dollar in European and US trade. The Euro fell from US$1.1330 to lows near US$1.1295 and was near US$1.1320 in afternoon US trade. The Aussie dollar fell from highs near US73.05 cents to lows near US72.60 cents and was near session lows in afternoon US trade. But the Japanese yen rose from 114.93 yen per US dollar to JPY113.96 and was near JPY114.10 in afternoon US trade
European sharemarkets were mixed on Wednesday. Reuters noted that “German medical tech firm Siemens Healthineers gained 5.6% after raising synergy targets from its Varian acquisition earlier this year.” Shares in Swiss luxury firm Richemont rose for a fifth day, up 0.6% to an all-time high, on broker upgrades. Eurozone inflation rose 4.1% in the year to October, more than twice the central bank’s target. The pan-European STOXX 600 index rose by 0.1% to record highs. The German Dax index rose by less than 0.1% to record highs. But the UK FTSE index fell by 0.5%. In London trade shares in Rio Tinto fell by less than 0.1% and BHP fell by 0.5%.
Japan’s Nikkei Stock Average fell 0.4% on possible profit-taking following the benchmark index’s four straight sessions of gains. A mixed bag of companies led losses, with Recruit Holdings dropping 4.6%, Toshiba 3.8% lower and Dentsu Group losing 3.7%.
Meanwhile, oil-related stocks such as Inpex rose 1.9% following comments by Japan’s industry ministry that it is considering a temporary measure to mitigate high gasoline prices, via subsidies to oil refiners which would allow them to cap wholesale prices.
Chinese stocks finished higher, helped by lithium producers and renewable-energy sectors. The virtual meeting between U.S. and China’s leaders had an overall positive impact as cooperation between the countries could strengthen global governance amid challenges posed by the pandemic and climate change, Ping An Securities said. The Shanghai Composite Index rose 0.4%, the Shenzhen Composite Index climbed 1.1%, and the ChiNext Price Index was up 0.8%.