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Global Market Report - 10 January

Lewis Jackson  |  10 Jan 2022Text size  Decrease  Increase  |  
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Australia

The ASX is poised to open flat after US shares ended lower Friday amid concerns over higher rates and a disappointing jobs report.

The Australian SPI 200 futures contract was up 2 points at 7351 as of 8.00 am AEST, suggesting a positive start to trading.

Wall Street wrapped up the first week of the new year with daily and weekly losses as investors worried about looming US interest-rate hikes and unfolding Omicron news.

The Dow Jones Industrial Average fell 0.01%, to 36,231.66, the S&P 500 lost 0.41% to 4,677.03 and the Nasdaq Composite dropped 0.96%, to 14,935.90. For the week, the Dow fell 0.3%, the S&P 500 declined 1.9% and the Nasdaq dropped 4.5%.

Locally, the ASX reversed some of the losses from the previous session thanks to strong performance in the banking sector. The S&P/ASX 200 closed 1.3% higher at 7,453 on Friday.

The session before the benchmark index lost 2.7%, its worst day since September 2020.

The heavyweight banking sector rose 1.9% with the big four lenders adding between 1.3% and 2.7%.

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Energy stocks jumped 2.2% as crude prices inched up on supply worries amid the political unrest in Kazakhstan coinciding with a drop in production from Libya. Woodside Petroleum and Santos added 2.2% and 2.9%, respectively.

The battered technology sector advanced 1.1%, reversing some of the gains notched in the previous session. Buy-now-pay-later giant Afterpay added 3%.

Building materials maker James Hardie shed 4.1% after firing its CEO for breaching code of conduct.

Meanwhile, the takeover battle for Australian Pharmaceutical Industries is over after it accepted Wesfarmers' $763.6 million offer after Woolworths Group pulled out from the bidding.

Turning to commodities, gold futures rose 0.5% to $US1797.40 an ounce; Brent crude edged 0.3% lower to $US81.75 a barrel; Iron ore fell 0.7% to US$127.30 a tonne.

In bond markets, the yield on the Australian 10-year bond slipped to 1.84% while the US 10-year Treasury advanced to 1.76%.

The Australian dollar was buying 71.81 US cents near 8.00am AEST, up from the previous close of 71.64. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, fell to 89.74.

Asia

China’s benchmark indexes traded mixed on Friday, with weakness in technology stocks offset by a rebound in property shares amid hopes of policy easing.

The blue-chip CSI300 index was flat, while the Shanghai Composite Index lost 0.2 per cent. The technology focused ChiNext dropped 1.8 per cent, for a weekly fall of 5.7 per cent, the biggest in 10 months.

Meanwhile, in Hong Kong stocks jumped nearly 2 per cent, their best day in a month, helped by a rebound in tech and property shares.

The Hang Seng Index rose 1.8 per cent, with technology giants Alibaba and JD.com posting 6.5% and 4.8% respectively. Property developers Country Garden, Evergrande and China Vanke added between 3.7% and 4.9%.

Japanese shares reversed a morning of gains to end mostly flat ahead of a three-day weekend. The benchmark Nikkei 225 closed 0.03% lower.

Europe

European markets slipped on Friday on concerns over rising inflation and coronavirus infections. The pan-European Stoxx Europe 600 closed 0.4% lower. The benchmark index ended the week 0.3% lower.

In London, the FTSE 100 finished 0.4% higher thanks to support from banking and mining stocks. Miners Anglo American and BHP Group posted strong gains as metal prices rose.

North America

Wall Street on Friday wrapped up the first week of the new year with daily and weekly losses as investors worried about looming US interest-rate hikes and unfolding Omicron news.

The Nasdaq posted its biggest weekly percentage fall since February 2021 and led declines for the day in the major indexes. Stocks fell on Friday after the December US jobs report missed expectations but was still seen as strong enough to keep the Federal Reserve's tightening path in place.

The Dow Jones Industrial Average fell 0.01%, to 36,231.66, the S&P 500 lost 0.41% to 4,677.03 and the Nasdaq Composite dropped 0.96%, to 14,935.90. For the week, the Dow fell 0.3%, the S&P 500 declined 1.9% and the Nasdaq dropped 4.5%.

Friday's Labor Department data showed the U.S. jobs market was at or near maximum employment even though employment rose far less than expected in December, when there were worker shortages. read more

On Wednesday, minutes released of the Fed's Dec. 14-15 policy meeting showed officials at the US central bank viewed the labour market as "very tight," and signalled the Fed may have to raise rates sooner than expected.

"The investor takeaway is that the labour market continues to be tight despite the headline miss," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

"Investors are concerned the Fed will be more aggressive than expected."

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

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