Global Fundamental Analysis 24/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 39 points up.


U.S. stocks dropped in another volatile session intraday as the Federal Reserve unveiled additional support for the financial system.  The rapid spread of coronavirus cases and Washington’s delay over an economic rescue package have rattled markets, sending U.S. stocks, global shares and oil prices lower.  


Gold futures rallied to post the largest daily dollar gain on record, with bullion up a third straight session after the Federal Reserve unveiled a major stimulus package that includes unlimited purchases of Treasurys and mortgage-backed securities.  


Overnight Summary




Australian Market

Australia’s S&P/ASX 200 index closed 5.6% lower at 4546, as it plumbed depths last seen in late 2012.  

Banks were sold off by investors skittish about a potential rise in loan defaults, with ANZ down 12% at A$14.10 and NAB down 11% at A$13.88. Macquarie slumped 15% to A$72.02 as investors grew nervous over its FY 2021 outlook, with profit already signaled to be lower in the current year.  

Fortescue dropped 7.7% to A$9.55, despite saying it’s on track to achieve annual iron-ore shipments guidance.   Oil Search fell 20% to A$1.88 after Papua New Guinea declared a 14-day state of emergency. Oil Search said it was implementing plans, along with Exxon Mobil, for the continued operation of the PNG LNG project.  


US Market

The Dow Jones Industrial Average fell nearly 1,000 points, recovered most of those losses and then tumbled again. The blue-chip index was off about 640 points, or roughly 3.4% with about one hour left in the trading day. The S&P 500 lost 3.2%. The tech-heavy Nasdaq Composite edged down 1%.  

Major U.S. indexes staged a short-lived rebound after Senate Minority Leader Chuck Schumer said lawmakers are “very close to reaching a deal” aimed at easing the economic damage from the virus. But they dropped again after the measure was put to a vote and Senate Democrats formally blocked the advancement of the deal for the second straight day.  



Gold had initially gained ground as global stocks traded lower on continued worries over the tremendous economic hit expected from the global COVID-10 pandemic. Gold moved even higher as U.S. benchmark stock indexes dropped in the wake of the Fed move.  

Gold for April delivery on Comex rose $83, or 5.6%, to settle at $1,567.60 an ounce, after putting in a weekly decline for the most-active contract of 2.1%. Based on the most-active contract, prices scored their largest one-day dollar gain based on records dating back to November 1984, according to Dow Jones Market Data. They also notched the largest daily percentage rise since March 2009.  


Oil Futures

U.S. benchmark oil futures settled with a gain, after spending the session seesawing between negative and positive territory, as traders weighed the potential impact of what the Federal Reserve referred to as “aggressive action” needed to soften the coronavirus pandemic’s blow to the economy.  

The central bank said it would buy unlimited amounts of Treasurys and securities tied to home and business mortgages to support the financial market.  May West Texas Intermediate oil rose 73 cents, or 3.2%, to settle $23.36 a barrel on the New York Mercantile Exchange.  



The U.S. dollar continued its parabolic rise as the Fed signaled it would do practically anything to help the U.S. economy in an effort to stave off a recession. The WSJ Dollar index, which measures the U.S. currency against a basket of 16 foreign currencies, was up 0.22% intraday, to 97.01 after its largest one-week gain since October 2008, according to Dow Jones Market Data.  

The euro, meanwhile, was up 0.49% against the dollar, while the Yen was down 0.45% against the U.S. currency.  


European Markets

European stocks weakened as a rise in global coronavirus cases fueled worries about the economic impact of the pandemic.  The Stoxx Europe 600 fell 4.3%, the FTSE 100 dropped 3.8%, the DAX declined 2.1% and the CAC-40 shed 3.3%.  

Travel and leisure stocks including easyJet and Cineworld Group fell on coronavirus concerns. Virgin Money U.K. shares dropped 22% as bank branches closed.  Shares in U.K. office-space provider IWG declined 17% after the suspension of its dividend as well as a planned share buyback.  


Asian Markets

Hong Kong shares started the week lower, giving up most of its Friday gains as investor sentiment continued to be weighed by the extent of the coronavirus pandemic. The benchmark Hang Seng Index slid 4.9% to settle at 21696.13, the lowest closing since late All index constituents fell, with exporters leading losses.

Japan’s Nikkei Stock Average, however, ended 2.0% higher at 16887.78, led by gains in SoftBank Group and pharmaceutical stocks, as recent selloffs over the coronavirus pandemic eased somewhat. SoftBank Group jumped 19% to the limit high of Y3,187 after the company said it would sell Y4.5 trillion worth of assets and spend up to Y2 trillion of the funds raised on share buybacks.  

South Korean stocks retreated on renewed concerns over the coronavirus pandemic, erasing most of the prior session’s gains. The benchmark Kospi closed 5.3% lower at 1482.46. Auto, tech and shipbuilding stocks led the falls.  

Indian shares ended sharply lower, as the market suffered its largest ever loss. The benchmark Sensex dropped 13% to settle at 25981.24, its lowest closing level since early 2016 amid fears over the impact of the coronavirus pandemic. All index constituents declined, with financial stocks leading losses.  

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Source - database | Page ID - 22034

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