Opening Call: The Australian share market is to open lower.
U.S. stocks ended lower, with the Dow industrials down more than 500 points. The 10-year Treasury yield fell to 1.44% from 1.51% Thursday. The WSJ Dollar Index rose 0.45% to 87.08. U.S. oil prices settled higher, up for a fourth straight week. Gold prices ended lower, suffering their biggest weekly drop since March 2020.
Australia’s S&P/ASX 200 index closed up 0.1%, narrowly missing out on its fourth record close this week. The benchmark rounded out a 0.8% weekly gain, finishing 0.2% short of Wednesday’s record 7386.2. Friday’s strong gains by tech, telecommunications, consumer and health stocks more than offset weakness in the heavyweight financial sector and continued weakness from materials following China’s plan to release metal reserves.
U.S. stocks retreated, with the Dow industrials posting its worst weekly performance since the end of January as traders warily eyed the Federal Reserve for hints of where monetary policy is headed.
The Dow Jones Industrial Average lost 1.6%. The index of blue-chip stocks dropped more than 3% this week, it’s worst showing since it retreated almost 3.3% in the last week of January.
The S&P 500 declined 1.3%. The Nasdaq Composite ticked 0.9% lower, as large technology stocks also fell. Policymakers had signalled Wednesday that they expect to raise interest rates by late 2023, sooner than they had previously anticipated. Sentiment waned again after Federal Reserve Bank of St. Louis leader James Bullard said on CNBC that he expects the first-rate increase even sooner, in late 2022.
Gold prices ended with a loss, with prices posting the biggest weekly drop since March 2020 as the U.S. dollar strengthened following a more hawkish tone from the Federal Reserve.
Gold for August delivery fell 0.3% to settle at $1,763.40 an ounce on Comex. According to FactSet data, gold saw a weekly loss of 5.9%, its largest since the week ended March 13, 2020.
Prices spent part of the day trading higher, but St. Louis Federal Reserve President James Bullard said he expects the central bank to raise its benchmark interest rate in That sent gold prices back toward session lows, said Edward Moya, senior market analyst at Oanda.
Oil futures ended higher, with prices recouping much of the losses from a day earlier that was blamed on strength in the dollar, following a shift in tone by the Federal Reserve this week.
West Texas Intermediate crude for July delivery rose 0.8% to settle at $71.64 a barrel on the New York Mercantile Exchange, lifting the U.S. crude benchmark up 1% for the week, following Thursday’s 1.5% loss. The global benchmark, August Brent crude, rose 0.6% at $73.51 a barrel on ICE Futures Europe. Brent was up 1.1% for the week.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1923 to lows near US$1.1846 and was near US$1.1863 at the US close. The Aussie dollar fell from highs near US75.49 cents to session lows near US74.75 cents at the US close. And the Japanese yen eased from near 109.93 yen per US dollar to JPY110.46 and was near JPY110.23 at the US close.
European sharemarkets ended lower on Friday. The pan-European STOXX 600 index fell by 1.6% to be down 1.2% over the week. The sentiment was dented by the EU losing its bid for faster Covid-19 vaccination deliveries from UK drugmaker AstraZeneca. The German Dax index lost 1.8% as German producer prices jumped 1.5% in May (survey: +0.7%). And the UK FTSE index slid 1.9% with UK retail sales down 1.4% in May (survey: +1.5%). In London trade, shares in Rio Tinto fell by 1.2% while shares in BHP lost 2.2%.
Japan’s Nikkei Stock Average closed 0.2% lower, as declines in financial, auto and airline stocks offset some gains in electronics companies.
Chinese stocks ended the session mixed, with liquor makers and commodities shares falling while auto companies gained. The Shanghai Composite Index ended 0.01% lower and was down 1.8% for the week. The Shenzhen Composite Index closed 0.8% higher and the ChiNext Price Index gained 1.6%.