Global Fundamental Analysis 25/08/2021

Global Fundamental Analysis 25/08/2021, FP Markets

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

U.S. stocks edged higher as markets continued to cheer full FDA approval of the Pfizer-BioNTech vaccine. The yield on the 10-year Treasury rose to 1.29% as work on U.S. spending plans continued. The WSJ Dollar Index slipped to 87.59, helping push gold prices higher. Oil prices rose sharply as worries over the Delta variant continued to abate.

Australian Market

Australia’s S&P/ASX 200 edged 0.2% higher despite heavy declines by companies reporting annual earnings. The energy, materials and tech sectors led the benchmark higher, while consumer stocks weighed.

US Market

U.S. stocks rose, giving the S&P 500 another record as the approval of Pfizer’s Covid-19 vaccine continued to lift sentiment. The S&P 500 gained 0.15%, pushing the benchmark index to its 50th record close of 2021.

The Dow Jones Industrial Average added 0.1%, while the technology-heavy Nasdaq Composite advanced 0.5%, clinching its first close above 15000. The full approval from U.S. regulators for the Covid-19 vaccine from Pfizer and partner BioNTech has raised hopes that more unvaccinated people will get the shot, potentially diminishing a threat to the economic outlook.  

“The more that we have people vaccinated, the more that we have a chance at seeing the light at the end of the tunnel for Covid being the dominant headline of the day,” said Beata Kirr, co-head of investment strategies at Bernstein Private Wealth Management.



Gold futures settled higher and posted their first finish above the key $1,800-an-ounce mark for the first time in nearly three weeks. Investors are waiting for the annual Jackson Hole central bankers monetary-policy symposium where Federal Reserve Chairman Jerome Powell on Friday may indicate that the central bank will slow monthly purchases of Treasurys and mortgage-backed securities that had helped to prop up financial markets during the worst of the pandemic in the spring of December gold futures rose 0.1% to settle at $1,808.50 an ounce, following a more than 1% gain for bullion on Monday.


Oil Futures

Oil futures extended a recovery from last week’s rout to a second session, buoyed by signs the spread of the coronavirus Delta variant may be abating in China. Also, a fire on an oil platform in Mexico knocked around a quarter of that nation’s daily crude output offline, contributing to oil’s gains.  

West Texas Intermediate crude for October delivery rose 2.9% to settle at $67.54 a barrel on the New York Mercantile Exchange, after jumping more than 5% Monday as prices broke a seven-day losing streak. October Brent crude, the global benchmark, rose nearly 3.4% to settle at $71.05 a barrel on ICE Futures Europe.



Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1725 to highs near US$1.1765 and was near US$1.1750 at the US close. The Aussie dollar rose from lows near US72.20 cents to highs near US72.70 cents and was near US72.55 cents at the US close. And the Japanese yen firmed from near 109.85 yen per US dollar to JPY109.40 and was near JPY109.65 at the US close.


European Markets

European share markets closed generally higher on Tuesday. The pan-European STOXX 600 index was flat but the German Dax rose by 0.3% and the UK FTSE index lifted by 0.2%. Basic resources rose 2% as oil and metal prices lifted in hopes of a faster pace of economic growth in China. Travel stocks rose 2% after US health regulators on Monday approved a Pfizer-BioNTech Covid-19 vaccine. There was caution though ahead of a meeting of global central bankers later this week. In London trade, shares in Rio Tinto rose by 3.0% and shares in BHP lifted by 1.3%.


Asian Markets

Earlier Tuesday, Chinese stocks finished higher, building on Monday’s upbeat performance, led by consumer-related sectors as the country’s Covid-19 outbreak appeared to ease. China still faces the risk of a sporadic virus outbreak, Nomura said, noting infections detected at Shanghai airport. The Shanghai Composite Index gained 1.1%, the Shenzhen Composite Index climbed 0.8% and the ChiNext Price Index closed 1.1% higher.  

Hong Kong shares had their best day in three weeks, with the Hang Seng Index gaining 2.5% as tech rebounded from China’s bruising regulatory crackdown and positive Covid news boosted casino shares.  

Japanese stocks also rose, led by gains in chip, airline and steel stocks, thanks partly to continuing hopes for Covid-19 vaccination progress. The Nikkei Stock Average finished 0.9% higher. Investors are focusing on Covid-19 infection trends and political developments in Japan.

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