Opening Call: The Australian share market is to open higher.
U.S. stocks were mixed after trading in a narrow range. The yield on the 10-Treasury ticked higher to 1.62%, while gold prices ticked lower as both markets awaited Wednesday’s Federal Reserve decision. The WSJ Dollar Index edged higher to 85.9.
Oil prices rose following reports that OPEC ministers have decided to reaffirm their support for allowing members to start raising production.
Australia’s S&P/ASX 200 closed 0.2% lower, weighed down by tech and health stocks. The heavyweight materials and financial sectors helped the benchmark pare losses.
New Zealand’s NZX-50 closed 0.2% lower as losses in a2 Milk and Meridian Energy offset a gain for Fisher & Paykel Healthcare.
U.S. stocks hovered near record levels as investors sold shares of technology and communications stocks and Treasury yields climbed.
The S&P 500 bounced around the flatline most of the trading session a day after setting its 24th closing record of the year. As of 4 p.m. ET, it was down less than 0.1%. Tesla shares were among the broad index’s biggest decliners after the electric car maker’s latest quarterly report underwhelmed investors.
After hitting its first record in about two months Monday, the Nasdaq Composite retreated 0.3%. The Dow Jones Industrial Average also struggled to gain momentum, finishing the day flat as falling shares of 3M weighed on the blue-chip index even after reporting better-than-expected earnings.
Gold futures ended slightly lower, with prices sticking to a tight trading range, as investors awaited the outcome of the Federal Reserve’s two-day meeting on monetary policy.
The two-day Fed meeting, which concludes Wednesday afternoon, is expected to see policymakers maintain their stance that they can wait until 2024 for U.S. interest rate increases, and say that it is too early to even start talking about tapering the Fed’s $120 billion per month in asset purchases, otherwise known as quantitative easing.
A rise in U.S. consumer confidence put some pressure on prices for haven gold. Gold futures for June delivery lost nearly 0.1% to settle at $1,778.80 an ounce on Comex.
Oil futures finished at their highest prices in a week after the Organization of the Petroleum Exporting Countries and its allies surprised the market by meeting a day earlier than scheduled, and decided to keep their current plan to gradually raise production in place.
West Texas Intermediate crude for June delivery rose 1.7% to settle at $62.94 a barrel on the New York Mercantile Exchange. That was the highest front-month contract finish since April 19, according to Dow Jones Market Data.
June Brent crude, the global benchmark, added 1.2% to settle at $66.42 a barrel on ICE Futures Europe, the highest finish since April 20.
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.2055 to highs near US$1.2090 and was near the highs at the US close. The Aussie dollar fell from highs near US78 cents to lows near US77.60 cents and was near US77.70 cents at the US close. And the Japanese yen eased from near 108.16 yen per US dollar to JPY108.76 and was near session lows at the US close
European share markets were mostly weaker on Tuesday ahead of the US Federal Reserve meeting. Travel stocks rose 3% to a record high. But shares in UBS fell by 2% after disclosing a $774 million loss from the collapse of US investment firm Arches. Still, UBS quarterly profit beat analyst forecasts. The pan-European STOXX 600 index fell by 0.1%. The German Dax index and the UK FTSE index both lost 0.3%. In London trade shares in Rio Tinto fell by 1.0% with BHP down by 1.7%.
Earlier Tuesday, China’s Shanghai Composite Index closed up less than 0.1%. Hong Kong’s Hang Seng Index ended essentially flat, extending the muted momentum that started at the beginning of the week.
Japan’s Nikkei Stock Average fell 0.5%, led by losses in real estate, pharmaceutical, chemicals and precision instrument companies. Local equities didn’t react much after the Bank of Japan left monetary policy unchanged as the decision was widely expected.