Global Fundamental Analysis 22/12/2020

Global Fundamental Analysis 22/12/2020, FP Markets

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


U.S. stocks pared earlier losses, but only the Dow managed to turn positive after a new Covid-19 strain was discovered in Britain. The yield on the 10-year Treasury ticked lower to 0.94%.

The WSJ Dollar Index rose to 85.38. News of the new Covid strain sent oil prices sharply lower. Gold slipped amid strength in the dollar.


Australian Market

Australia’s S&P/ASX 200 edged 0.1% lower after a Covid-19 cluster in Sydney grew, but authorities appeared cautiously optimistic it is mainly constrained to the Northern Beaches area of the city. Utilities were the biggest loser. Energy stocks also weakened.


US Market

The S&P 500 fell as a rapidly spreading strain of coronavirus emerging from England prompted fresh travel restrictions, a setback for the global economic recovery.

he broad-based index closed lower by 0.4%. The Dow Jones Industrial Average ticked up 0.1%, having bounced back from a midmorning loss of about 1.4%.

The technology-heavy Nasdaq Composite slipped 0.1%. All three indexes were trading at records last week.

Countries across Europe and beyond barred travellers from Britain in an effort to keep out an infectious variant of coronavirus that is spreading rapidly in England.



Gold prices finished modestly lower, knocked down as the dollar staged a mini-rebound amid growing concerns about a possible variant of the novel strain of coronavirus that causes Covid-19.

February gold lost 0.3% to settle at $1,882.30 an ounce, retreating from around its highest level since November.


Oil Futures

Oil prices fell after a new strain of coronavirus discovered in the U.K. sparked fresh travel restrictions across Europe and concerns that there may be more lockdowns globally.

Brent crude oil, the international benchmark, dropped 2.6% to $50.91 a barrel. Futures tied to West Texas Intermediate, the main U.S. crude gauge, fell 2.8% to $47.74 a barrel.

While prices rebounded a bit from lows on the day, the declines were the sharpest since Nov. 6 and snapped five-session winning streaks for both Brent and WTI.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.2128 to highs near US$1.2253 and was near US$1.2230 at the US close. The Aussie dollar rose from lows near US74.61 cents to highs near US75.98 cents and was near US75.85 cents at the US close. And the Japanese yen rose from near 103.88 yen per US dollar to JPY103.29 and was near JPY103.30 at the US close.


European Markets

European sharemarkets fell sharply on Monday. The pan-European STOXX 600 index shed 2.3% with bank shares down 3.6%. The German Dax index lost 2.8%. The rapid spread of a new strain of the coronavirus forced more stringent restrictions in Britain and border closures from several countries. Uncertainty over Brexit trade deal negotiations added to pressure on the market. Pfizer’s Covid-19 vaccine was approved in Europe. The UK FTSE index fell by 1.7%. UK shares of Rio Tinto (-0.8%) and BHP (-0.1%) both fell.


Asian Markets

Earlier Monday, Hong Kong shares fell on worries over the swift spread of a new coronavirus strain in the U.K., with the Hang Seng Index closing 0.7% lower. Banks, telecom companies and property developers were among the worst performers.

Japanese stocks also ended lower, slipping 0.2%, dragged by falls in auto and real-estate stocks, on persistent concerns about prolonged Covid-19 containment measures.

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Source - database | Page ID - 22012

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