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Global Market Report - 23 December

Lewis Jackson  |  23 Dec 2021Text size  Decrease  Increase  |  
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Australia

The ASX is set to rise in line with a rally on Wall Street amid good news regarding Omicron.

The Australian SPI 200 futures contract was up 39 points or 0.5% at 7310 near 8.00 am AEST on Thursday, suggesting a positive start to trading.

The S&P 500 rose Wednesday as major US indexes advanced with investors taking cheer from new research showing Omicron cases are less likely to require hospital treatment.

The US equity benchmark rose 1% after a late-afternoon rally, adding to Tuesday's jump of 1.8%. The Dow Jones Industrial Average added 0.7%, while the tech-heavy Nasdaq Composite advanced 1.2%.

South African researchers estimated the risk of hospitalization with Omicron is 70%-80% lower than with the Delta variant, though scientists are cautious the same pattern will play out elsewhere, including the US.

The Australian dollar jumped to 72.16 US cents near 8.00am AEST, up from the previous close of 71.44. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, slumped to 89.89.

Locally, the S&P/ASX 200 closed 0.1% higher at 7364.8 after a see-saw session in which the benchmark opened higher but then had to claw back some ground mid-session.

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With the heavyweight financial sector finishing flat, weakness in mining was offset by gains elsewhere, most notably in tech. Iron-ore miners BHP, Fortescue and Rio Tinto gave up between 0.8% and 2.2%, while gold miners were also weak.

Gold explorer Falcon Metals fell 37% on its ASX debut.

Link Administration jumped 15% after agreeing to a takeover by Dye & Durham, helping the tech sector add 2.6%. Afterpay rose 5.4% for its strongest one-day gain since early August.
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Gold futures edge up 0.9% to $US1805.40 an ounce; Brent crude added another 2% to $US75.51 a barrel; iron ore lost 2.6% to US$123.39 a tonne.

The yield on the Australian 10-year bond dipped to 1.57%, with the US 10-year Treasury yield fell to 1.45%.

Asia

Chinese stocks ended mixed, as property developers weakened after a recent rally, offsetting gains by electronics and auto makers. China Vanke, Seazen Holdings, Greenland Holdings and Gemdale Corp. lost 2.1%-2.5%. Although pressure on developers' liquidity is easing, some companies still face financing difficulty, Essence International says. The Shanghai Composite Index edged down 0.1%, the Shenzhen Composite Index gained 0.6% and the ChiNext Price Index was 0.5% higher.

Hong Kong stocks closed the session higher, extending a recovery from steep Monday losses that had sent the market to a multi-month low. The benchmark Hang Seng Index added 0.6% . Chinese tech giants extended their rebound, following strength in the tech-heavy Nasdaq overnight. NetEase jumped 3.2% on an upbeat outlook for its upcoming new game launches, while Alibaba Health Information rose 1.5%.

Japanese stocks finished slightly higher, led by gains in electronics and e-commerce stocks, thanks partly to a weaker yen despite continuing concerns about Omicron. Sony Group gained 2.8% and Z Holdings advanced 2.7%. The Nikkei Stock Average rose 0.2%.

Europe

European stocks rose for a second day as traders shrugged off economic and coronavirus concerns. The pan-European STOXX 600 index, which tracks the performance of companies across 17 European companies rose 0.9%.

In London, the FTSE 100 gained 0.6% with Omicron coronavirus variant and stimulus concerns held off for now and equities seeing out the end of the year with a cautiously optimistic tone.

North America

The S&P 500 rose Wednesday as major US indexes advanced with investors taking cheer from new research showing Omicron cases are less likely to require hospital treatment.

The US equity benchmark rose 1% after a late-afternoon rally, adding to Tuesday's jump of 1.8%. The Dow Jones Industrial Average added 0.7%, while the tech-heavy Nasdaq Composite advanced 1.2%.

South African researchers estimated the risk of hospitalization with Omicron is 70%-80% lower than with the Delta variant, though scientists are cautious the same pattern will play out elsewhere, including the US.

Stock trading has been choppy, with large moves in both directions, as investors seek to determine how severe the economic impact of the rapid spread of Omicron will be. Adding to nervousness in the market, investors are preparing for the Federal Reserve to raise interest rates in 2022 and are trimming positions before year-end.

"Some investors just want to protect some of their profits, I would assume," said Daniel Egger, chief investment officer at Switzerland-based St. Gotthard Fund Management. "This volatility could spill over into next year."

Consumer discretionary stocks led the S&P 500's sectors up. All 11 of its sectors were up.

Among individual stocks, shares of Paychex rose 5.8% after the human-resources company said earnings rose in its second quarter on higher sales. Tesla jumped 7.5% as founder Elon Musk announced he had sold ‘enough’ stock in the electric vehicle maker for now.

Share markets were also helped by several positive pieces of economic news. December consumer confidence was stronger than expected, with inflation worries declining. November US home sales rose, helped by low mortgage rates and a strong job market, and on pace for their most robust year since 2006.

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

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