Australia

Australian shares are set to rise following a record on Wall Street as lawmakers passed a historic stimulus bill passed and inflation fears eased.

The Australian SPI 200 futures contract was up 33 points, or 0.5 per cent, at 6,741 points at 8.30am Sydney time on Thursday, suggesting a positive start to trading.

The S&P 500 rose on Wednesday and the blue-chip Dow hit a record high after tepid consumer price data for February calmed inflation worries and Congress gave final approval to one of the largest economic stimulus measures in US history.

The Dow Jones Industrial Average rose 1.45 per cent to end at 32,295.71 points, while the S&P 500 gained 0.60 per cent to 3,898.73. The Nasdaq Composite dropped 0.04 per cent to 13,068.83.

Locally, taxpayers will bankroll 800,000 half-priced airfares under a $1.2 billion stimulus package aimed at shielding the aviation and tourism industries, and throwing a lifeline to regional economies when the $90 billion JobKeeper wage subsidy scheme ends this month, The Australian reports.

Australia's share market closed lower after one of its biggest sectors, materials, was widely sold after a drop in the price of iron ore.

The S&P/ASX200 benchmark index closed lower by 57.1 points, or 0.84 per cent, to 6,714.1 on Wednesday.

The All Ordinaries closed lower by 53.2 points, or 0.76 per cent, at 6,947.2.

The materials sector dropped by 2.51 per cent after iron ore prices in China fell.

The energy sector fell almost three per cent as oil prices slid, while another heavyweight sector, financials, slumped by 1.25 per cent.

Gold was up 0.4 per cent at $US1,722.84 an ounce; Brent oil was down 0.1 per cent to $US67.45 a barrel; Iron ore was up US26¢ to $US164.67 a tonne.

Meanwhile, the Australian dollar was buying 77.26 US cents at 8.30am, up from 76.79 US cents at Wednesday’s close.

Asia

China’s blue-chip shares closed higher on Wednesday, a day after it hit a near 3-month low, although gains were capped by lingering concerns of policy tightening as the economy recovers.

The blue-chip CSI300 index ended 0.66 per cent higher, led by a 2.63 per cent jump in its healthcare sub-index and a 1.94 per cent gain in the consumer staples sector.

The Shanghai Composite index closed down 0.05 per cent at 3,357.74.

In Hong Kong, the Hang Seng index was up 134.29 points, or 0.47 per cent, at 28,907.52. The Hang Seng China Enterprises index rose 0.79 per cent to 11,059.67.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.19 per cent, while Japan’s Nikkei index closed up 0.03 per cent.

Europe

Europe’s main index hovered near pre-pandemic highs on Wednesday, as a rise in shares of Adidas after an upbeat sales forecast and gains in telecoms and healthcare stocks outweighed losses in the mining and travel sectors.

The pan-European STOXX 600 index rose 0.4 per cent after a rally in technology stocks on Tuesday pushed the benchmark to its highest level since February 2020.

Miners, retailers, and travel and leisure companies led the declines in Europe, while telecoms jumped 2.3 per cent and healthcare rose 1.0 per cent.

Most European sectors have had some time in the spotlight this week, starting with gains in cyclicals, then a tech rally, and then a rise in defensives on Wednesday.

“People investing in European markets right now are from overseas like the United States, consequently they have a view that they’d like a little bit of everything from each sector. It is this general view of Europe vs. America and Europe is cheaper,” said Chris Bailey, European strategist at Raymond James.

German sportswear maker Adidas AG added 2.8 per cent as it aims to double its e-commerce sales by 2025 and make its products more sustainable as part of a five-year plan to lift profitability closer to that of rival Nike.

Germany’s DAX index has had a strong start to March, hitting an all-time high again during the session, with analysts pointing to the economy’s focus on international exports giving it an edge over other regions such as France or Spain, which have a more European focus.

“The most important thing about Germany apart from the companies it has on its index is its exports, so the great advantage of an economy like Germany is that it gives you an opportunity to access international options through a European channel,” Bailey said.

However, trading has been volatile in recent weeks as government bond yields rose on concerns that central banks could begin tightening monetary policy as the global economy recovers, raising borrowing costs.

Calming some fears about inflation was a report on US consumer prices that showed the US consumer price index rose 0.4 per cent in February, in-line with expectations, after a 0.3 per cent increase in January.

Boosting the telecom sector, Deutsche Telekom rose 4.9 per cent after Citigroup upgraded the stock to “buy” from “hold”, saying the company has a solid position across all its market segments.

Just Eat Takeaway.com gained 5.9 per cent after the food-ordering company said it expected further growth in 2021.

North America

The S&P 500 rose on Wednesday and the blue-chip Dow hit a record high after tepid consumer price data for February calmed inflation worries and Congress gave final approval to one of the largest economic stimulus measures in US history.

A rotation into sectors such as energy and financials continued, both in small- and large-cap stocks, as investors bet on consumer spending when the US economy reopens and sold the big tech names that have fuelled the rally since last March.

An expected economic surge once the coronavirus vaccines are rolled out along with the monster fiscal stimulus have triggered inflation fears and a spike in Treasury yields, leading the Nasdaq to tumble as much as 12 per cent from its 12 February record close.

But an auction of US$38 billion ($49 billion) in benchmark 10-year Treasury notes was not as bad as feared as underlying inflation remained muted, helping push yields down to a session low of 1.506 per cent.

The “market seemed nonplussed and Treasuries rallied but that didn’t seem to give a boost to tech (stocks),” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Rising yields have weighed on technology shares as they rely on cheap funding for growth.

Investors are shifting funds from tech stocks with lofty valuations to other groups, such as energy and financials, that are undervalued and more of a play on an improving economy in a post-COVID world than big tech is, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“It is occurring in fits and starts,” Tuz said. “That is essentially the overwhelming theme in the market right now and it probably will continue until these things run their course.”

The move away from Apple Inc, Amazon.com Inc, Facebook Inc, Tesla Inc and Microsoft Corp, all down on the day, led small-cap stocks to rise more than double the gains of the S&P 500.

Also helping lift equities are rising estimates for US corporate profitability this year following surprisingly strong fourth-quarter earnings and growing optimism about the recovery.

The Dow Jones Industrial Average rose 1.45 per cent to end at 32,295.71 points, while the S&P 500 gained 0.60 per cent to 3,898.73. The Nasdaq Composite dropped 0.04 per cent to 13,068.83.

Shares of Roblox Corp jumped 54 per cent at one point in its New York Stock Exchange trading debut, valuing the US gaming company at more than US$42 billion and making it one of the most active stocks on the NYSE.

The Nasdaq closed lower in choppy trade after logging its best one-day percentage jump in four months on Tuesday.

The sweeping US$1.9 trillion COVID-19 relief bill passed by the US House of Representatives gave President Joe Biden his first major victory in office.

Some of the US$1,400 in payments heading to most Americans could end up in the stock market and could provide a boost for GameStop and other stocks popular among retail investors active in online social media forums.

Trading in GameStop gyrated wildly after multiple NYSE trading halts as shares of the video game retailer and other so-called meme stocks approached levels last seen during their late January rally.

Among other “meme” stocks, Koss Corp soared, rising as much as 70 per cent before the bell.

With Reuters