Global Fundamental Analysis 27/09/2021

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

U.S. stocks edged mostly higher after an Evergrande payment deadline passed. The 10-year Treasury note yield rose to 1.45% versus 1.408% on Thursday. The WSJ Dollar Index rose 0.26% to 87.89. U.S. oil futures ended up for the fourth straight session as Brent closed near a three-year high. Gold settled higher as Evergrande woes boosted the metal’s haven appeal.

Australian Market

Australia’s S&P/ASX 200 index closed 0.4% lower after a mixed session across sectors, with energy stocks emerging as the strongest performers. The major banks, however, rose between 0.1% and 1.0%. Australia’s benchmark index was 0.8% lower for the week.


US Market

The Dow Jones Industrial Average and the S&P 500 ticked up, clinching weekly gains despite uncertainty over the fate of indebted property giant China Evergrande Group. The Dow Jones Industrial Average added 0.1% and the S&P 500 rose 0.15%. The technology-heavy Nasdaq Composite was down less than 0.1%.

The session was a quiet end to an eventful week. Markets have been whipsawed by fears that the possible collapse of Evergrande could spill over into global markets and add to an already darkening outlook for global growth. The DJIA and S&P 500 ended the session with weekly gains of 0.6% and 0.5%, respectively, while the Nasdaq was little changed for the week.



Gold futures settled higher, a day after posting their sharpest daily loss in a week, as investors continued to digest the Federal Reserve’s monetary policy plans as well as China’s crackdown on cryptocurrencies and developments tied to property giant Evergrande.

December gold rose 0.1% to settle at $1,748.10 an ounce on the session. For the week, gold futures ended 30 cents higher than last Friday’s $1,751.40 settlement, FactSet data show. The gold price will break past $1,840 resistance “if and when there is confirmation that China will eradicate cryptocurrencies,” said Chintan Karnani, director of research at Insignia Consultants. There has to be more “clarity” on a potential crypto ban from China.


Oil Futures

Oil futures climbed for a fourth straight session, with Brent crude, the global price benchmark, marking another settlement at its highest since October 2018. West Texas Intermediate crude for November delivery rose 0.9% to settle at $73.98 a barrel on the New York Mercantile Exchange.

Prices saw the highest front-month contract finish since July 13 and gained 3% for the week, according to Dow Jones Market Data. Front-month November Brent rose 1.1% at $77.16 a barrel on ICE Futures Europe, logging another settlement at the highest in nearly three years.



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1740 to lows near US$1.1700 and was near US$1.1715 at the US close. The Aussie dollar fell from highs near US72.95 cents to lows near US72.35 cents and was near US72.60 cents at the US close. And the Japanese yen fell from 110.30 yen per US dollar to near JPY110.78 and was near JPY110.72 at the US close.


European Markets

European share markets were weaker on Friday. Investors monitored developments at troubled Chinese property giant Evergrande. Shares of sportswear makers fell after Nike cut sales forecasts. The pan-European Stoxx 600 index lost 0.9% on Friday but rose 0.3% over the week. The German Dax index fell by 0.7% ahead of the general elections. And the UK FTSE index fell by 0.4%. In London trade, shares in Rio Tinto fell by 0.6% and BHP shares fell by 1.3%.


Asian Markets

Japanese stocks closed broadly higher, led by especially sharp gains in shippers, as concerns ebbed about ripples from China Evergrande’s troubles. The Nikkei Stock Average rose 2.1%. Chinese stocks ended the session mixed as investors remained on the sidelines amid uncertainty from China Evergrande’s liquidity crisis. The benchmark Shanghai Composite Index fell 0.8% while the Shenzhen Composite Index edged 0.7% lower.]

The ChiNext Price Index, a measure for emerging industries and startups, gained 0.8%. The top-performing sectors included consumer products such as snack and edible-oil producers, as well as consumer services providers including tourism agencies. But the momentum was offset by broad losses in the commodities sector, as steelmakers and mining firms weakened.

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