ASX set for more gains as Wall Street rally continues

2. Waning fears: Overall, markets remain confident the economic impact of the virus will be limited, with markets rallying across the globe.

“There is at least not as much of a fear of an outcome of a pandemic that will have as much economic pressure globally as maybe initially was thought,” said Delores Rubin, senior equities trader at Deutsche Bank Wealth Management in New York.

3. Data boost: Wall Street also rose on more promising US data. with the ADP National Employment Report showing private payrolls jumped by 291,000 jobs in January, the most since May 2015, while a separate report showed US services sector activity picked up in January, suggesting the economy could continue to grow moderately this year even as consumer spending is slowing.

In late trade, the Dow is 1.5 per cent higher, while the S&P 500 (+0.9 per cent) and Nasdaq (+0.4 per cent) are also firmly in positive territory.

4. ASX: The Australian sharemarket looks poised to make it three straight days of gains, with futures pointing to a gain of 55 points at the open.

On Wednesday, The ASX 200 rose 27.4 points, or 0.4 per cent, to 6976.1, recording two consecutive sessions in the green for the first time in more than two weeks.

5. Tesla slams on the brakes: After gaining more than 50 per cent over the past week, Tesla hit a wall on Wednesday, with shares slumping as high as 19 per cent after an executive in China said production would be halted at its Shanghai plant on the back of the coronavirus outbreak. The executive said production is scheduled to recommence on February 10.

6. Oil bounces back: Oil prices jumped about 2 per cent on the coronavirus reports and news that the Organisation of the Petroleum Exporting Countries (OPEC) and its producer allies were considering further output cuts to counter a potential squeeze on global oil demand.

Brent crude oil futures ended the session up $US1.32, or 2.5 per cent, at $US56.46 a barrel while U.S. West Texas Intermediate (WTI) crude gained $US1.14, or 2.3 per cent, to settle at $US50.75. Both contracts rose more than 4 per cent during the session.

7. Stocking up on gold: Gold rose on Wednesday on bargain hunting, reversing course from a two-week low touched earlier, as investors latched on to the metal’s overall uptrend on the back of a low interest rate environment globally and lingering uncertainties.

Spot gold rose 0.4 per cent to $US1,558.12 per ounce by 1842 GMT. US gold futures settled 0.5 per cent up at $US1,562.80.

“Overall the trend is up, people want to be in gold right now just because of the central banks and what they’re doing in the long term. So, people are looking at the dip as an opportunity to accumulate more gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

8. Market watch:

ASX futures up 55 points or 0.8 per cent to 6963 near 6.45am AEDT

  • AUD +0.1 per cent to 67.44 US cents
  • On Wall St near 2.45pm: Dow +1.5 per cent S&P 500 +0.9 per cent Nasdaq +0.4 per cent
  • In New York: BHP +1 per cent Rio +1.2 per cent Atlassian -4 per cent Tesla -18.8 per cent
  • In Europe: Stoxx 50 +1.2 per cent FTSE +0.6 per cent CAC +0.9 per cent DAX +1.5 per cent
  • Nikkei 225 futures +1.2 per cent
  • Spot gold +0.3 per cent to $US1558.07 /oz at 12.26pm NYC
  • Brent crude +4 per cent to $US56.10 a barrel
  • US oil +4 per cent to $US51.59 a barrel
  • Iron ore -2.9 per cent to $US81.31 a tonne
  • Dalian iron ore -1.5 per cent to 578 yuan
  • LME aluminium +1.8 per cent to $US1717 a tonne
  • LME copper +1.9 per cent to $US5722 a tonne
  • 2-year yield: US 1.44 per cent Australia 0.74 per cent
  • 5-year yield: US 1.46 per cent Australia 0.74 per cent
  • 10-year yield: US 1.65 per cent Australia 1.03 per cent Germany -0.36 per cent
  • 10-year US/Australia yield gap: 62 basis points

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

Information is of a general nature only.


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