Opening Call: The Australian share market is to open higher.
U.S. stocks ended higher as economic data boosted optimism. The yield on the 10-year Treasury note declined slightly to 2.748% from 2.756% on Thursday. The WSJ Dollar Index fell 0.22% to 94.32. U.S. oil prices finished at an 11-week high. And gold prices ended higher as a key inflation gauge showed signs of cooling.
Australia’s S&P/ASX 200 index closed 1.1% higher, rounding out a consecutive weekly gain amid strength in shares of financial and commodity companies. The benchmark index finished 0.5% higher for the week. The energy sector led the day’s gains amid higher oil prices.
The S&P 500 rose, extending a recent stretch of gains and snapping a weekslong losing streak. The broad-market benchmark was up 2.5%. The Dow Jones Industrial Average added about 1.8%, and the Nasdaq Composite Index climbed 3.3%. The rally built on days of gains and marked a sharp reversal from a streak of weekly losses that had the S&P 500 teetering on the edge of bear-market territory.
All three indexes were up 6% or more for the week. Nasdaq led gains, rising 6.8% over the past five trading days. Both the S&P 500 and Dow finished with their best weeks since November 2020, according to Dow Jones Market Data.
A slew of earnings results and economic data has boosted optimism among investors in recent sessions, helping pull major indexes away from their lows of the year. On Friday, new data showed that U.S. households boosted spending for a fourth straight month, though they dipped deeply into savings to do so. Meanwhile, a closely watched U.S. inflation reading eased in April.
Gold futures finished a touch higher as investors weighed data that showed hot U.S. inflation cooled its pace last month. June gold rose 0.2% to close at $1,851.30 an ounce on Comex. “The past two days saw outflows from the gold ETFs again, meaning that gold is lacking any impetus from financial investors,” Daniel Briesemann, research analyst at Commerzbank, told clients in a note.
Oil futures ended higher to cap a week of strong price action, with the U.S. benchmark posting its highest finish in more than 11 weeks with summer driving season set to begin over Memorial Day weekend. West Texas Intermediate crude for July delivery rose 0.9% to close at $115.17 a barrel on the New York Mercantile Exchange, the highest close for a front-month contract since March 11, according to Dow Jones Market Data. The U.S. benchmark rose for a fifth consecutive week, advancing 4.3%. July Brent crude, the global benchmark, rose 1.7% to finish at $119.43 a barrel on ICE Futures Europe, its highest front-month close since March 25.
“Oil prices have steadily moved higher this week as Shanghai has eased restrictions and the EU has worked towards an embargo on Russian crude,” said Oanda’s Craig Erlam in a research note. “The OPEC+ meeting is the key event to watch next week but even if we get a commitment to increase targets — which is unlikely — that will only likely increase the amount to which they’ll fall short of them.”
Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0755 to lows near US$1.0695 and was near US$1.0725 at the US close. The Aussie dollar firmed from lows near US71.25 cents to highs near US71.65cents and was near US71.60 cents at the US close. And the Japanese yen held between 126.75 yen per US dollar and JPY127.20 and was near JPY127.11 at the US close.
European sharemarkets advanced on Friday. Technology led gains, up 3.3%, with industrials up 2.3%. The pan-European STOXX 600 index rose by 1.4% to be up 3% on the week. The German Dax index lifted by 1.6% and the UK FTSE index gained 0.3%. In London trade, shares in Rio Tinto rose by 1.3% while BHP shares rose by 3.5%.
Earlier, in Asia, Japan’s Nikkei Stock Average ended 0.7% higher, led by gains in electronics and shipping stocks. Lasertec gained 4.2% and major shipper Kawasaki Kisen Kaisha climbed 5.0%. Chinese stocks ended the session mixed, with gains in the energy sector offset by losses among property developers. Cnooc surged 10% and PetroChina rose 3.5% as oil prices continued to climb, while coal producer China Shenhua advanced 3.5%. Dragging on the market were property-related industries. The Shanghai Composite Index gained 0.2%, the Shenzhen Composite Index ended down 0.12%, while the ChiNext Price Index edged up 0.1%.