Global Fundamental Analysis 21/05/2021

Australian Market

Australia’s S&P/ASX 200 index closed 1.3% higher, clawing back some of its losses from Wednesday’s sharp fall. The session’s result marked the benchmark index’s largest percentage increase since March 1. Nearly all sectors finished in the green. Technology stocks were a standout, with only the materials sector finishing in the red.

US Market

U.S. stocks rebounded after jobless claims data showed that the labour market continued to recover, with major indexes snapping a three-day losing streak.  

The S&P 500 edged up 1.1%, while the Dow Jones Industrial Average gained 0.6%. The technology-heavy Nasdaq Composite added 1.8%. As of Wednesday’s close, the S&P 500 and Dow had been off less than 3% from the records they set two weeks ago, while the Nasdaq had dropped almost 6% from its late April high. The technology and communication services sectors led the way in the S&P 500, both rising more than 1.6%.

Commodities

June gold edged up by 0.02% to settle at $1,877.60 an ounce, following a 0.7% gain on Wednesday. The climb was gold’s sixth in a row, the longest stretch of consecutive session gains since a nine-session climb ended on July 29, 2020, FactSet data show. Prices on Thursday settled at the highest for a most active contract since Jan. 7.

Oil Futures

Oil futures fell for the third session in a row, with weakness attributed in part to signs that negotiators were making progress toward a deal that would see the U.S. lift sanctions against Iran, eventually returning a large source of supply to the market.  

On its expiration day, West Texas Intermediate crude for June delivery fell $1.31, or 2.1%, to end at $62.05 a barrel on the New York Mercantile Exchange, with front-month prices logging their lowest finish since April 26, according to Dow Jones Market Data.

The July contract, which is now the front month, lost $1.41, or 2.2%, to settle at $61.94. July Brent crude, the global benchmark, declined by $1.55, or 2.3%, at $65.11 a barrel on ICE Futures Europe, with prices at their lowest finish since April 13.

Forex

Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.2177 to highs near US$1.2228 and was near US$1.2225 at the US close. The Aussie dollar rose from lows near US77.34 cents to highs near US77.80 cents and was near US77.70 cents at the US close. And the Japanese yen firmed from near 109.12 yen per US dollar to JPY108.74 and was near JPY108.80 at the US close.

European Markets

European sharemarkets rose on Thursday. The pan-European STOXX 600 index gained 1.3% with tech stocks up 2.7%. Shares of chipmaker Nordic Semiconductor jumped 9.8% to the top of STOXX 600 on reports that Franco-Italian rival STMicroelectronics is mulling an offer to buy the company. The German Dax index lifted 1.7% and the UK FTSE index was up 1%. In London trade shares in Rio Tinto fell by 0.2% and shares in BHP lost 0.6%.

Asian Markets

The Nikkei Stock Average closed higher, as gains in electronics stocks offset losses in steel and companies posting weak results. Chip-testing equipment maker Advantest rose 3.5% and Sharp climbed 2.9%, while Nippon Steel fell 4.8%. Tokio Marine declined 5.2% after it posted a 38% drop in full-year net profit. The Nikkei Stock Average rose 0.2%.  

Chinese stock markets closed mixed, extending a streak of muted sessions for a third day. The benchmark Shanghai Composite Index lost 0.1%, while the Shenzhen Composite Index rose 0.1%. The ChiNext Price Index, a measure for emerging industries and startups, added 0.9%.

Home appliance makers were the top winners after Beijing signalled it intended to curb commodity price increases, which will reduce raw material costs for home appliance manufacturers. But the gains were offset by weakness in the coal, steel and oil sectors.