Opening Call: The Australian share market is to open higher.
U.S. stocks were mixed as investors weighed strong earnings and demand against worries over inflation, supply-chain issues and energy supplies. The yield on the 10-year Treasury rose to 1.59%, helping push gold prices lower. The WSJ Dollar Index ticked higher to 88.43. U.S. oil prices finished at another seven-year-high despite spending much of the session in the red.
Australia’s S&P/ASX 200 rose 0.3% as gains by mining and financial stocks offset weakness elsewhere. Shares in 11 of the 12 largest companies by market capitalization rose. The tech sector, however, slipped amid losses by Afterpay, Xero and WiseTech Global.
U.S. stocks ended trading mixed as investors weighed a strong start to earnings season against concerns that mounting inflation, supply-chain problems and an energy crunch could be risks for global growth. The S&P 500 rose 0.3% while the Dow Jones Industrial Average lost about 0.1%. The tech-heavy Nasdaq Composite gained 0.8%. All three indexes slid to start the day but pared their losses as the session continued.
“Many of the companies we are looking at are citing very strong demand, and we can work with a situation where demand is strong and supply is problematic because eventually, we will work through supply problems,” said Christopher Harvey, head of the equity strategy at Wells Fargo Securities. “We’re trying to ascertain if we’ve had a peak in supply-chain issues… [and whether] this might be as bad as it gets.
Gold futures settled with a loss for a second straight session, pressured by a rise in bitcoin and some strength in U.S. Treasury yields but a retreat in most global stock markets helped to limit price losses for the precious metal. December gold futures fell nearly 0.2% to settle at $1,765.70 an ounce, following a 0.6% weekly gain on Friday, which represented the steepest weekly climb since the week ended Sept. 3.
Oil futures took a split path, with the global benchmark ending lower for the first time in three sessions and the U.S. benchmark significantly paring early gains after both touched multiyear highs. Natural-gas prices, meanwhile, fell by nearly 8%, as a forecast for warmer weather helped to ease worries about winter energy supplies. The oil market is likely to see an increase in volatility because of the recent multiyear highs for prices, said Phil Flynn, senior market analyst at The Price Futures Group. However, “from the supply versus the demand side, all the news is bullish.”
Mr Flynn said oil prices will likely “continue to rise over the long term, but don’t be surprised to see little pullbacks like this along the way.”West Texas Intermediate crude for November delivery tacked on 0.2% to settle at $82.44 a barrel on the New York Mercantile Exchange, after trading as high as $83.87 — a level was last seen in 2014. December Brent crude, the global benchmark, declined by 0.6% at $84.33 a barrel on ICE Futures Europe. Brent traded as high as $86.04 a barrel, not far off its September 2018 high of $86.74 — a push above that level would see Brent also trading at a seven-year high.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1570 to highs near US$1.1620 and was near US$1.1610 at the US close. The Aussie dollar rose from lows near US73.80 cents to highs near US74.20 cents and was near the highs at the US close. And the Japanese yen rose from 114.43 yen per US dollar to JPY114.12 and
was near JPY114.31 at the US close.
European share markets closed lower on Monday with weaker economic growth in China weighing on luxury good makers. Shares in LVMH fell by 2.2%. Oil and gas shares fell 0.2% in response to
mixed oil prices. The pan-European STOXX 600 index fell by 0.5%. The German Dax index lost 0.7% and the UK FTSE index fell by 0.4%. In London trade shares in Rio Tinto fell by 0.7% and shares in BHP fell by 0.1%.
Earlier Monday, Chinese stocks ended the session mixed, as the market extended its range-bound trading pattern seen so far this month. The benchmark Shanghai Composite Index fell 0.1%, while the Shenzhen Composite Index rose 0.1%. The ChiNext Price Index was largely unchanged, edging up by 0.16 points. Coal miners continued their strength amid elevated coal prices due to sector-wide supply tightness. However, the gains were offset by consumer product firms such as snack makers and hotel operators, after China’s third-quarter GDP growth missed expectations.
Hong Kong shares extended a broad upturn so far this month despite the disappointing Chinese growth data. The benchmark Hang Seng Index rose 0.3%. Chinese sportswear makers led gains and Macau casino operators lent further support. Japan’s Nikkei Stock Average fell 0.1%, dragged by declines in pharmaceutical and food stocks despite some gains in energy and auto companies. Investors are focusing on any policy developments ahead of Japan’s lower-house election later this month.