Opening Call: The Australian share market is to open higher.
U.S. stocks clawed back yesterday’s losses after first-time unemployment benefits filings fell to their lowest since September 1969. The yield on the 10-year Treasury edged higher to 2.37%. The WSJ Dollar Index strengthened to 91.5. Oil prices gave back some recent gains as some investors began to doubt the European Union may make any immediate decision to ban imports of Russian crude oil. Gold prices reached a nearly two-week high.
Australian Market
Australia’s S&P/ASX 200 edged up 0.2%, racking up a third consecutive gain thanks to strength in commodity stocks. Energy explorers Beach, Santos and Woodside put on between 0.6% and 2.8% amid higher oil prices, while the materials sector added 1% on gains by iron-ore and gold miners. The country’s heavyweight financial sector pared overall gains, pulling back 0.4% after recent strength. The ASX 200 was up 1.3% for the week.
US Market
U.S. stocks rose, with Wall Street indexes recouping Wednesday’s losses, led by gains among semiconductor and materials stocks. The S&P 500 rose 1.4%, the technology-focused Nasdaq Composite Index climbed 1.9% and the Dow Jones Industrial Average gained 1.0%. All three indexes declined in the previous session as concerns about rising energy prices and supply shortages again rattled investors.
Ten of the 11 sectors in the S&P 500 posted gains. The tech segment rose 2.4%, followed by materials with a 1.8% gain. Energy, by far 2022’s best performing sector, was the only group in the red, down 0.1%. Stocks have come under pressure this year amid rising inflation, mixed economic signals, the war in Ukraine and the continuing disruptions from the pandemic. The S&P 500 was down about 6% year to date entering the session, while the Nasdaq, down about 11%, is in its longest bear market since 2008.
Commodities
Gold futures rose, settling at their highest level in about two weeks, as the U.S. announced new sanctions on Russia for its ongoing invasion of Ukraine and investors monitored hawkish remarks by Federal Reserve officials. Prices for the metal were solidly higher as “marketplace risk aversion remains overall elevated amid the Russia-Ukraine war and its many implications for the world,” said Jim Wyckoff, senior analyst at Kitco.com, in a daily note. Gold futures for April delivery rose 1.3% to settle at $1,962.20 an ounce on Comex – at the highest most-active contract settlement since March 11, FactSet data show.
Oil Futures
Oil futures ended with a loss of more than 2%, a day after settling at their highest price in more than two weeks, with the U.S. announcing fresh sanctions on Russia. President Biden met with European allies and other world leaders in Brussels in response to Russia’s Feb. 24 invasion of Ukraine. Crude prices declined amid expectations that NATO won’t sanction Russian energy soon, said Edward Moya, senior market analyst at OANDA.
“NATO members are not throwin’ away a shot at ratcheting the pressure against Russia right now,” said Moya, in a market update. However, “they will take time before they have to resort to an oil embargo on Russia.” West Texas Intermediate crude for May delivery fell nearly 2.3% to settle at $112.34 a barrel on the New York Mercantile Exchange. May Brent crude, the global benchmark, lost 2.1% to close at $119.03 a barrel on ICE Futures Europe.
Forex
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.0970 to highs near US$1.1009 and was near US$1.0995 at the US close. The Aussie dollar rose from lows near US74.65 cents to highs near US75.25 cents and was near US75.15 cents at the US close. And the Japanese yen eased from 121.20 yen per US dollar to JPY122.40 and was near JPY122.31 at the US close.
European Markets
European sharemarkets were mixed on Thursday. Banks fell 0.7% while retail stocks were led lower by a 3.3% drop in British clothing retailer, Next, after it trimmed its sales and profit forecast for
2022-23. Telecom Italia gained 8.4% after Reuters reported that KKR remains interested in taking over the Italian telecoms group. The pan-European STOXX 600 index fell by 0.2%. The German Dax index fell by 0.1% but the UK FTSE index rose by 0.1%. In London trade, shares in Rio Tinto rose by 1.0% and BHP shares lifted by 2.2%.
Asian Markets
Earlier Thursday, Chinese stocks pulled back from a broad rally that started late last week amid signs of an easing of U.S.-China tensions over Russia’s invasion of Ukraine. The benchmark Shanghai Composite Index fell 0.6%, while the Shenzhen Composite Index lost 0.9%. The tech-heavy ChiNext Price Index held up relatively better, slipping 0.4%. Property stocks led the downturn, as the sector pulled back from strong gains over the past several sessions amid supportive policy signals and fund-raising progress by several large developers. Liquor makers further weighed on the market amid continuing worries over China’s consumption slowdown due to the country’s latest Covid-19 outbreak.
Hong Kong stocks also pulled back from their recent rebound. The benchmark Hang Seng Index fell 0.9%. Property companies led the downturn. Tech stocks further weighed on the market, as Sunny Optical plunged 8.1% and Tencent dropped 5.9%, after both companies’ earnings missed expectations. Japanese shares, however, rose, helped by gains in metal and energy stocks. Sumitomo Metal Mining rose 3.4% and Inpex added 2.0%. Toyota Motor climbed 2.9%, thanks in part to a weaker yen. The Nikkei Stock Average gained 0.3%.
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