Global Fundamental Analysis 21/07/2021

Global Fundamental Analysis 21/07/2021, FP Markets

Opening Call: The Australian share market is to open higher.

U.S. stocks rebounded after the biggest one-day decline since October. The 10-year Treasury yield rose 2.7 basis points to 1.208%. The WSJ Dollar Index rose 0.14% to 87.66. U.S. oil prices ended higher, rising 1% after the biggest drop in months on Monday. Gold futures ended higher after back-to-back declines. 

Australian Market

Australia’s S&P/ASX 200 index closed 0.5% lower after paring early losses during a volatile session. Commodity stocks weighed heavily, with the materials sector losing 1.8% and energy dropping 1.6%. The financial sector slipped 0.3%.

US Market

U.S. stocks rebounded as investors rushed in to buy shares that had been knocked down in Monday’s dramatic selloff. The rally suggested that even as the rapidly spreading Delta variant of the coronavirus casts a shadow over the economic outlook, many investors still see the stock market as the best place to put their money. The Dow Jones Industrial Average climbed 1.6%, after logging its worst session since October on Monday. The S&P 500 gained 1.5%, while the tech-heavy Nasdaq Composite added 1.6%.  

“A lot of our client conversations have really been people trying to look to find time to put money to work,” said Mike Stritch, chief investment officer at BMO Wealth Management. “People step in, and they don’t want to get caught missing an opportunity to buy at a few points lower.”



Gold futures settled marginally higher to log their first gain in three sessions, as investors assessed demand for the yellow metal amid worries about the spread of the Delta variant of the coronavirus, which roiled financial markets Monday.  August gold edged up by 0.1% to settle at $1,810 an ounce on Comex after trading as high as $1,825.90. Prices had lost 0.3% on Monday.


Oil Futures

Oil futures settled with a gain of more than 1%, a day after the U.S. benchmark suffered its biggest single-session decline in months. West Texas Intermediate crude for August delivery, which expired at the end of the trading session, rose 1.5% to end at $67.42 a barrel on the New York Mercantile Exchange.

The new front-month, September crude, added 85 cents, or 1.3%, to settle at $67.20 a barrel. September Brent crude, the global benchmark, tacked on 1.1% to $69.35 a barrel on ICE Futures Europe after falling nearly 6.8% Monday — the biggest one-day percentage decline since March.



Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1800 to US$1.1755 and was near US$1.1780 at the US close. The Aussie dollar held between US73.00 cents and US73.35 cents and was near US73.30 cents at the US close. And the Japanese yen eased from 109.30 yen per US dollar to JPY109.95 and was near JPY109.85 at the US close.


European Markets

European sharemarkets rose on Tuesday. Miners led gains (up 1.5%) following the release of positive quarterly production numbers from major companies. Shares in Swiss bank UBS climbed 5.3% on posting a 63% jump in second-quarter net profit. Shares in Credit Suisse also rose in response, up 2.6%. But the travel & leisure sector fell 0.2%. The pan-European STOXX 600 index rose by 0.5%. The German Dax index gained 0.6% while the UK FTSE lifted by 0.5%. In London trade, shares in Rio Tinto rose by 1.4% and BHP rose by 1.9%


Asian Markets

Japan’s Nikkei Stock Average closed 1% lower, dragged by declines in energy and real-estate stocks amid renewed concerns about the Covid-19 pandemic. Chinese stocks ended the session mixed after the country’s central bank kept the loan prime rate unchanged for the 15th-straight month, which China Securities said was in line with market expectations. The electronics sector advanced, while lenders suffered losses.

The Shanghai Composite Index edged 0.1% lower, the Shenzhen Composite Index added 0.2%, and the ChiNext Price Index was 0.4% higher. Elsewhere, New Zealand’s NZX-50 closed down 0.01% as gains in hospital equipment maker Fisher & Paykel Healthcare overcame weakness in other heavyweight stocks. The sentiment was hit by the lengthening lockdowns in neighbouring Australia and the possibility that the fast-spreading Covid-19 Delta variant could set back the global recovery.

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