Opening Call: The Australian share market is to open lower.
U.S. stocks ended mostly higher, with the S&P 500 at fresh highs and the Dow wrapping up its best week since March. The yield on the 10-year Treasury rose to 1.53%. The WSJ Dollar Index slipped to 86.5, helping boost gold prices higher. Oil prices rose for a third consecutive winning day, as markets expect demand growth to outpace increased production.
Australia’s S&P/ASX 200 closed 0.4% higher, paring weekly losses despite Sydney’s increased Covid restrictions. The benchmark gained 0.7% in early trade, but lost momentum after workers and residents in some parts of Sydney were told to stay home to slow the city’s latest outbreak. The financial and materials sectors rose while the tech sector slipped. The ASX 200 lost 0.8% for the week, ending a run of five weekly rises.
U.S. stocks mostly rose, lifted by robust gains among shares of everything from banks to oil producers and manufacturers.
Driving stocks higher this week, investors say, was data signalling a fresh acceleration in the world economy, as well as optimism over the prospect of additional fiscal stimulus.
President Biden and a group of 10 centrist senators agreed to a roughly $1 trillion infrastructure plan Thursday that would go toward improving the electrical grid, transit, roads and bridges and other forms of infrastructure.
The Dow Jones Industrial Average advanced 0.7%. For the week, it rose 3.4%. The S&P 500 climbed 0.3%, notching its 31st record close of the year, while the Nasdaq Composite inched down less than 0.1%.
Gold futures found support from a decline in the U.S. dollar over the course of the week, as traders weighed data showing a rise in U.S. inflation, but no change to consumer spending.
August gold futures rose nearly 0.1% to settle at $1,777.80 an ounce. For the week, bullion based on the most-active contract saw a 0.5% gain, following three-consecutive weekly declines.
Oil futures climbed to tally a fifth consecutive weekly gain as investors remained upbeat about demand amid a global economic recovery.
The reason for the “string of gains is pretty simple: global oil demand is coming back faster than supply,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “U.S. oil production is sputtering and OPEC seems reluctant to add too many barrels even if it is clear that the global oil market is begging for more.”
West Texas Intermediate crude for August delivery rose 1% to settle at $74.05 a barrel on the New York Mercantile Exchange, lifting the U.S. benchmark by 3.9% for the week, based on the front-month contracts. Prices marked the highest finish since Oct. 9, 2018, according to Dow Jones Market Data.
Global benchmark Brent crude’s September contract, which is the most active, climbed 0.8% to $75.38 a barrel on ICE Futures Europe. Brent finished with a 3.6% weekly rise.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1975 to lows near US$1.1925 and was near US$1.1930 at the US close. The Aussie dollar fell from highs near US76.15 cents to lows near US75.80 cents and was near US75.85 cents at the US close. And the Japanese yen held between 110.48 yen per US dollar and JPY110.87 and was near JPY110.77 at the US close.
European sharemarkets rose on Friday. Banks, miners and construction stocks were amongst the gainers. Shares in Credit Suisse rose by 1.9% after Reuters reported that it was considering a
potential merger with UBS. The pan-European STOXX 600 index rose by 0.1%. The German Dax index also lifted by 0.1%. The UK FTSE index rose by 0.4%. In London trade, shares in Rio Tinto rose by 1.0% with shares in BHP up 2.1%.
Earlier Friday, Chinese stocks advanced after a brief retreat on Thursday. The benchmark Shanghai Composite Index rose 1.1%, extending a winning streak for a fifth session to its highest closing level in nearly a month. The Shenzhen Composite Index added 1.1%, while the ChiNext Price Index was up 2.1%.
Coal producers led the upturn as the sector continued to strengthen amid elevated coal prices.
Hong Kong stocks extended their winning streak for the third straight day. The benchmark Hang Seng Index rose 1.4% as the tech and oil sectors continued to lead gains.
Nikkei Stock Average rose 0.7%, driven by strong gains in steel and energy stocks, on hopes for U.S. growth. Signs of an economic recovery are being closely watched as Covid-19 vaccinations accelerate.