Opening Call: The Australian share market is to open higher.
U.S. stocks were mostly lower for the session and unanimously lower for the week. The yield on the 10-year Treasury rose to 1.73%, paring a surge earlier in the session. The WSJ Dollar Index rose to 86.6. Oil prices rose amid tensions in the Middle East. Gold prices pushed higher, helped by inflation worries.
Australia’s S&P/ASX 200 closed 0.6% lower, with most sectors finishing in the red. Energy stocks took the biggest hit, with the sector finishing the day down 2.0%.
Declines in financial stocks pulled the Dow Jones Industrial Average lower Friday, and all three major stock indexes ended the week in the red.
The blue-chip index dropped 0.7%, while the S&P 500 edged down 0.1%. The technology-heavy Nasdaq Composite climbed 0.8%. All the indexes posted weekly losses of less than 1%.
Markets have been choppy this week, with investors weighing brightening economic prospects on one hand and worries that interest rates will climb sooner than anticipated on the other. Investors are betting that inflation will rise as growth picks up and remain elevated long enough to force the Federal Reserve to tighten monetary policy.
Those concerns have led to a sharp selloff in the government bond market and spurred investors to exit tech and other high-growth stocks.
Gold futures marked their highest settlement in about three weeks, as U.S. Treasury yields steadied after a spike in the previous session and with the yellow metal underpinned by inflation worries and jitters about this week’s slump inequities.
Gold found “comfort above $1,730 thanks to a dovish Federal Reserve and U.S.-China tensions,” said Lukman Otunuga, senior research analyst at FXTM.
Gold for April delivery climbed 0.5% to settle at $1,741.70 an ounce on Comex. Prices saw a 1.3% weekly rise — the second in a row.
Oil futures ended higher, for the first time in six sessions, buoyed in part by growing tensions in the Middle East.
Prices, however, logged their largest weekly loss since October as worries over renewed lockdowns and a sluggish vaccine rollout in parts of Europe threaten energy demand.
Reports Friday that an oil facility in Saudi Arabia was attacked by drones helped lift prices to session highs.
West Texas Intermediate crude for May delivery tacked on 2.3% to settle at $61.44 a barrel on the New York Mercantile Exchange, reversing up earlier losses.
May Brent crude, the global benchmark, rose 2% to $64.53 a barrel on ICE Futures Europe.
For the week, WTI crude lost 6.4%, while Brent declined by 6.8%, the largest declines since October for both benchmarks.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1936 to lows near US$1.1873 and was near US$1.1880 at the US close. The Aussie dollar fell from highs near US77.71 cents to lows near US76.90 cents and was near US76.95 cents at the US close. And the Japanese yen fell from near 108.61 yen per US dollar to JPY109.03 and was near JPY108.65 at the US close.
European sharemarkets fell on Friday. The pan-European STOXX 600 index lost 0.8% to end the week up 0.2%. France’s CAC 40 index slid 1.1% after the nation imposed a new four-week regional lockdown to curb another wave of Covid-19 cases. The German Dax and UK FTSE indexes both dropped 1.1%. In London trade, shares in Rio Tinto (-1.6%) and BHP (-2%) both fell.
Earlier Friday, China’s major stock benchmarks ended lower, mainly due to banks retreating from a recent run higher. The Shanghai Composite Index dropped 1.7%, while the Shenzhen Composite Index lost 1.9% and the ChiNext Price Index slid 2.8%. Many other sectors also ended in the red, likely as investors eyed a rise in U.S. Treasury yields overnight.
Hong Kong’s Hang Seng Index dropped 1.4%, also plagued by concerns about a rise in Treasury yields. Tech stocks, whose elevated valuations are particularly vulnerable to increases in bond yields, broadly slid.
The Nikkei Stock Average ended 1.4% lower after the Bank of Japan said it will only buy exchange-traded funds linked to broader market index Topix. The BOJ has been buying Nikkei-linked ETFs as well. Any signs of an economic recovery were in focus as the government ends the Covid-19 state of emergency for Tokyo on Sunday.