Opening Call: The Australian share market is to open higher.
U.S. stocks ended higher as retailer results impressed. The yield on the 10-year Treasury note rose to 2.76% from 2.75% on Wednesday. The WSJ Dollar Index fell 0.22% to 94.55. Oil prices ended sharply higher on tight supplies. And gold prices eked out a gain as the dollar pulled back and stocks rallied.
Australia’s S&P/ASX 200 index closed 0.7% lower, weighed down by the heavyweight stocks that drove the previous session’s gains. Shares in 12 of the 13 largest companies by market cap lost ground amid economic concerns raised by data showing weaker-than-expected first-quarter business investment. An index of the 20 biggest companies slipped 0.9% amid losses among banks, miners and consumer staples. Appen surged 29% on a takeover proposal by Telus, while Block rose 1.2%.
U.S. stocks rose, with the Dow industrials notching a fifth consecutive day higher, after strong results from retailers lifted sentiment across the market. The Dow Jones Industrial Average added 1.6%, while the S&P 500 advanced 2%. The tech-heavy Nasdaq Composite Index climbed 2.7%, helped by gains in shares of Apple, Microsoft, Amazon.com and Tesla.
The outlook for stocks turned cheerier Thursday when several retailers delivered strong results. Macy’s reported robust sales growth and lifted its earnings guidance, while discount chains Dollar General and Dollar Tree beat Wall Street’s earnings expectations.
Gold futures finished modestly higher as the dollar extended its recent pullback and investors dove back into stocks. June gold gained 0.1% to settle at $1,847.60 an ounce on Comex. The ICE U.S. Dollar Index, a gauge of the dollar’s strength against a basket of its main rivals, was off 1.2% for the week through Thursday. Some strategists, including Steven Barrow, head of G-10 strategy at Standard Bank, predicted the greenback could start to weaken.
Oil futures ended sharply higher, buoyed after data from Wednesday which showed a fall in U.S. crude and gasoline inventories ahead of the start of summer driving season, while the European Union continued to wrangle over a plan to phase out imports of Russian energy in response to Russia’s invasion of Ukraine. West Texas Intermediate crude for July delivery rose 3.4%, to end at $114.09 a barrel on the New York Mercantile Exchange. July Brent, the global benchmark, settled at $117.40 a barrel on ICE Futures Europe, up 3%.
“U.S. drivers are already facing higher prices at the gas pump, and the summer driving season could exacerbate the trends that are already in place. Inventories typically drop through the summer months, and stockpiles of gasoline in the United States are already 8% below seasonal norms,” said Peter McNally, global sector lead for industrials materials and energy at Third Bridge.
Major currencies were mostly stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.0661 to highs near US$1.0729 and was near US$1.0725 at the US close. The Aussie dollar firmed from lows near US70.59 cents to highs near US71.02 cents and was near US70.95 cents at the US close. But the Japanese yen eased from 126.55 yen per US dollar to JPY127.41 and was near JPY127.05 at the US close.
European sharemarkets advanced on Thursday. The panEuropean STOXX 600 index rose by 0.8% with retail stocks up 4.7%. The German Dax index lifted by 1.6% and the UK FTSE index gained 0.6%. Shares of British retailers Ocado, Marks & Spencer, Next and Associated British Foods rallied between 4.4% and 11.5% after the British government unveiled a new £15 billion package of support for UK households. In London trade, shares in Rio Tinto fell by 0.3% while BHP shares dipped by 0.6%.
Earlier, in Asia, Japan’s Nikkei Stock Average ended 0.3% lower, dragged by falls in electronics stocks, as concerns continue about higher costs of operations owing to supply-chain disruptions. Advantest dropped 3.6% and Fanuc closed 2.2% lower. Meanwhile, Mitsubishi Electric shed 4.1% after it reported additional quality-control issues.
Chinese stocks ended the session mixed as the market withdrew from the previous day’s gains to extend its range-bound trading pattern so far this week. Central China Securities analysts expect fluctuations to persist in the near term, but are confident of a broad recovery trend from current levels, as China’s pandemic resurgence increasingly gets under control. The benchmark Shanghai Composite Index and the Shenzhen Composite Index each rose 0.5%.
The tech-heavy ChiNext Price Index was the only loser, falling 0.2%. Medical services providers and medical equipment makers were among the top losers. The weakness was offset by gains in engineering companies and machinery suppliers.