ASX set for modest bounce as oil, gold rise on mideast fears

4. Stocks underperform slightly: Global stock markets traded flat, if not slightly lower, as traders took the opportunity to bank some profits, following yesterday’s shift in market sentiment. Asian and European stock indices underperformed, with the Nikkei shedding 1.9 per cent, the DAX dropping 0.7 per cent, and the FTSE100 giving up 0.6 per cent. US stocks did perform a little stronger, recouping a sliver of Friday’s losses, to finish the first trading session of the week 0. 2 per cent higher.

5. ASX set to recoup Monday’s losses: The ASX200 ought to rebound this morning, courtesy of Wall Street’s positive lead. It backs up what was a soft, albeit marginally positive Monday for the local market. The ASX found itself bolstered by the climb in oil prices and gold prices yesterday, with mining and energy stocks keeping the ASX200 in positive territory. The major laggard for the market proved to be the banking sector, which fell as a result of the drop in local and global bond yields.

6. Services PMI data beats expectations: Economic data was dominated by a spate of global services PMI figures in the past 24 hours. The numbers, particularly those out of Europe and the US, printed generally better than expected, and eased some of the fears about the general state of global growth, elicited by last week’s series of underwhelming manufacturing PMI figures. The data docket remains relatively light still for the rest of the week, with the big focus on US Non-Farm Payrolls data on Friday.

7. US Dollar looking weak: Although there was a general desire for safety in the market yesterday, the US Dollar continued to underperform. The greenback has experienced increased selling pressure in recent week, as traders bet that a lift in global economic activity ought to narrow the US economy’s outperformance of that of the rest of the world. The US Dollar Index has shed over two per cent since the beginning of December – and nearly 3 and a half per cent since its October highs.

8. Market watch:

ASX futures up 36 points or 0.5% to 6709 near 7.30am AEDT

  • AUD -0.2% to 69.37 US cents
  • On Wall St near 3.30pm: Dow flat S&P 500 +0.2% Nasdaq +0.4%
  • In Europe: Stoxx 50 -0.6% FTSE -0.6% CAC -0.5% DAX -0.7%
  • Nikkei 225 futures +0.9% Hang Seng +0.5%
  • Spot gold +0.9% to $US1566.50/oz at 1.21pm New York
  • Brent crude +0.3% to $US68.81 a barrel
  • US oil +0.2% to $US63.18 a barrel
  • Iron ore +1.1% to $US95.61 a tonne
  • Dalian iron ore +0.2% to 666 yuan
  • LME aluminium +0.5% to $US1833 a tonne
  • LME copper +0.1% to $US6138 a tonne

This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG

Listen to IG’s podcast Chatting Markets here

Information is of a general nature only.


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