Global Fundamental Analysis 28/01/2021

Global Fundamental Analysis 28/01/2021, FP Markets

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


Stocks dropped on concerns about the vaccine rollout. The U.S. 10-year Treasury note’s yield was down slightly at 1.02%. The WSJ Dollar Index was 0.56% higher at 85.54. Crude oil ended mixed as weekly domestic supplies dropped by nearly 10 million barrels. Gold prices ended lower as the U.S. dollar strengthened.


Australian Market

Australia’s S&P/ASX 200 index closed 0.65% lower, weighed by energy and mining stocks. The energy sector lost 3.4% after rating agency S&P said producers including Woodside Petroleum were at risk of a downgrade.


US Market

The Dow Jones Industrial Average dropped more than 600 points amid concerns about Covid-19 vaccine distribution, while traders were also captivated by the frenzied trading in GameStop and other heavily-shorted stocks.  

The blue-chip index declined by 2.1%, and the S&P 500 dropped 2.6%. The Nasdaq Composite lost 2.6%. Delays in the rollout of Covid-19 vaccines, coupled with lingering lockdown measures, marked a “double whammy” of bad news for investors, said Hani Redha, a portfolio manager at PineBridge Investments.



Gold futures suffered a fifth-consecutive session of declines, with strength in the U.S. dollar pressuring prices for the dollar-denominated metal. February gold fell $6, or 0.3%, to settle at $1,840.50 an ounce, after falling 0.2% on Tuesday.

The day’s decline matched the longest streak of lower settlements for a most-active contract since a five-session slide ended on April 30, FactSet data show.


Oil Futures

Oil futures finished mixed, with global prices slightly lower, but U.S. benchmark crude up after a government report revealed a weekly drop of nearly 10 million barrels in domestic crude supplies.

West Texas Intermediate crude for March delivery rose 24 cents, or 0.5%, to settle at $52.62 a barrel on the New York Mercantile Exchange, but of the day’s high of $53.30. March Brent crude, the global benchmark, finished lower, down 10 cents, or 0.2%, at $55.28 a barrel on ICE Futures Europe



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2164 to lows near US$1.2058 and was near US$1.2100 at the US close. The Aussie dollar fell from highs near US77.45 cents to lows near US76.44 cents and was near US76.50 cents at the US close. And the Japanese yen fell from near 103.63 yen per US dollar to JPY104.19 and was around JPY104.15 at the US close.


European Markets

European share markets fell on Wednesday. The pan-European STOXX 600 index lost 1.2% with Eurozone bank shares down 2.8% after the ECB’s governing council, Klaas Knot, said the bank could decide to cut its deposit rate further below zero. The German Dax index dropped 1.8% after Germany’s growth forecast for 2021 was cut from 4.4% to 3%. The UK FTSE index slid 1.3% as the EU, and AstraZeneca (-2.2%) disagreed over vaccine delivery delays. UK-listed shares in Rio Tinto (-3.0%) and BHP (-2.4%) both fell.


Asian Markets

Japan’s Nikkei Stock Average closed 0.3% higher, supported by real estate developers and food companies. Coronavirus-related developments are being closely watched, amid local media reports that Japan may extend a state of emergency for parts of the country as case numbers continue to rise.

China’s major stock benchmarks edged higher after Tuesday’s pullback, which was partly triggered by a liquidity drain by China’s central bank that led to worries of a new round of liquidity tightening. The Shanghai Composite Index rose 0.1%, while the Shenzhen Composite Index gained 0.3% and the ChiNext Price Index added 0.7%.

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Source - database | Page ID - 22099

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