Global Fundamental Analysis 21/09/2020

Global Fundamental Analysis 21/09/2020, FP Markets

OPENING CALL: The Australian share market is to open lower.

U.S. stocks fell to end a volatile week. The yield on the 10-year Treasury was flat at 0.70%. The WSJ Dollar Index rose to 87.95. Oil prices rose amid growing resolve around output cuts. Gold prices rose on the belief that low rates will stay for a few years, at least.
Overnight Summary



Australian Market

Australian shares broke a four-week losing streak, rising 0.1% for the week despite a lackluster final session. The benchmark S&P/ASX 200 closed 0.3% lower on the day, with all but two of 12 sectors on the index registering declines. Industrial stocks led losses.

New Zealand’s NZX-50 dropped 1.2% to close at 11633.52 and also posted its third consecutive weekly loss. Index changes in Australia for some dual-listed New Zealand stocks such as Auckland International Airport, Chorus and Fisher & Paykel Healthcare drove selling, said Shane Solly, portfolio manager at Harbour Asset Management.


US Market

Declines in shares of technology companies pushed the S&P 500 to a third consecutive week of declines, capping another tumultuous stretch for the stock market.

The S&P 500 slipped about 1.1%, with losses accelerating midday. The tech-heavy Nasdaq Composite lost 1.1%. The Dow Jones Industrial Average shed about 245 points, or 0.9%. The S&P 500 and Nasdaq posted weekly declines, while the Dow had a slim weekly loss as of 4 p.m. ET.



Gold futures tallied a second weekly gain in a row, though prices only scored a modest boost from Federal Reserve policy that signaled a lower-for-longer path for interest rates for the next three to four years.

December gold rose $12.20, or 0.6%, to settle at $1,962.10 an ounce, following a 1.1% slide on the day before.


Oil Futures

U.S. benchmark oil prices gained 0.3% to $41.11 a barrel and notched more than a $3 increase for the week, bolstered by OPEC promises to comply with production cuts, and data showing another big drop in U.S. crude-oil inventories.

While the cartel has reduced cut obligations from a peak of nearly 10 mmbbl/d, total output cuts remain far above any supply reductions in the past,” said Robbie Fraser at Schneider Electric.



Major currencies were mixed against the US dollar in European and US trade. The Euro held between US$1.1830 and highs near US$1.1870 and was near US$1.1835 at the US close. The Aussie dollar held between US72.80 cents and US73.25 cents and was near US72.90 cents at the US close. And the Japanese yen lifted from 104.82 yen per US dollar to JPY104.26 and was near JPY104.55 at the US close.


European Markets

European sharemarkets closed lower on Friday with the panEuropean STOXX 600 index down by 0.7%. Travel and leisure lost 3.15% in response to a lift in coronavirus cases across the continent. Banking shares lost 2.6% as global central banks pledged to leave rates at low levels for an extended period. Shares in Caixabank fell 2.2% after it agreed to buy state-owned Bankia (shares down 4.8%) for 4.3 billion euros (US$5.1 billion) to create Spain’s biggest domestic bank. The German Dax index and the UK FTSE index both lost 0.7%. In London trade, Rio Tinto rose by 0.3% with shares in BHP up by 0.5%.


Asian Markets

Chinese stocks rebounded from consecutive declines earlier in the week. The benchmark Shanghai Composite Index gained 2.1%, its strongest one-day gain since mid-August, while the Shenzhen Composite Index added 1.5%. The ChiNext Price Index advanced 1.5%. The financial sector was among the top gainers.

Japanese stocks rose, driven by sharp gains in information-technology services stocks on hopes that the new government led by Prime Minister Yoshihide Suga will accelerate Japan’s digital transformation. The Nikkei Stock Average settled 0.2% higher.

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