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Global Market Report - 30 March

Lewis Jackson  |  30 Mar 2022Text size  Decrease  Increase  |  
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Australian shares are set to rise following a rally in US and European markets amid signs of a diplomatic solution to the war in Ukraine. Oil prices fell.

ASX futures were up 56 points or 0.75% at 7503 as of 8.00am AEST, suggesting a positive start to the day.

The technology-heavy Nasdaq Composite led the major indexes, closing higher by 264.73 points, or 1.8%. The Dow Jones Industrial Average added 338.30 points, or about 1%. The S&P 500 rose 1.2%, with all sectors bar energy posting gains.

Investors bid up equities following Russian statements that it would “dramatically” reduce military activities around the cities of Kyiv and Chernihiv as officials from Russia and Ukraine met in Turkey for discussions over a possible peace deal.

Western leaders responded with skepticism and US President Joe Biden said he wouldn’t “read anything into” Russia’s decision.

Oil markets reflected the uncertainty, declining in a volatile session that saw Brent Crude plummet to its lowest level in weeks before paring losses to end down 1.1% at US$111.24.

Locally the S&P/ASX 200 closed 0.7% higher at 7464.3, completing its longest winning streak of 2022 despite a pull-back in commodity stocks.

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The benchmark index followed a positive lead by US equities to notch a sixth straight gain that is its longest run since late December. The heavyweight financial index added 0.6%, hours before the federal government was scheduled to release its annual budget.

The Federal Government handed down a budget dominated by cash payments and tax holidays aimed addressing the rising cost of living as it eyes an election due by late May.

Banks--Commonwealth, ANZ, NAB and Westpac--put on between 0.2% and 1.1%. Block jumped 6.8% and Appen rose 6.7% as tech stocks surged.

Health and consumer stocks were also strong, but the materials and energy sectors slipped 0.2% and 0.55%, respectively, amid softer gold and oil prices.

Australian inflation expectations jumped to their highest level since 2012 as consumers feel the sting of rising fuel and food prices, according to a weekly survey by ANZ released on Tuesday.

In commodity markets, iron ore rose 55 cents to US$152.95 per tonne; gold futures slipped 1.1% to $1923.80.

Bond market selling paused on Tuesday with government debt retracing some of the losses notched over the past month. The US 10-Year Treasury Note yield fell to 2.40%. The yield on the Australian 10-year bond slipped to 2.89%. Yields rise when prices fall.

The Australian dollar pushed back above 75 cents and was buying 75.08 US cents as of 8.00am AEST, up from the previous close of 74.90. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, fell to 91.32.


Chinese stocks closed lower, amid concerns over the economic impact of the staggered temporary lockdown in Shanghai. The government's zero-Covid-19 policy may suggest more city lockdowns could happen if the country's recent surge in infections continues to rise further, IG says. The Shanghai Composite Index was 0.3% lower, the Shenzhen Composite Index fell 0.6% and the ChiNext Price Index slipped 0.1%. Auto stocks were lower, with SAIC Motor dropping 1.3% and Great Wall Motor losing 0.9%.

Hong Kong's Hang Seng Index closed 1.1% higher, as gains in tech shares help offset losses in property stocks. Tech companies led the gains as sentiment was supported by easing concerns over a standoff between US and Chinese regulators on Chinese ADRs, as well as news that several tech companies have recently announced share buybacks, KGI Securities says. JD.com advanced 6.0%, Meituan added 5.8% and Alibaba rose 2.2%. Among property stocks, Longfor Group fell 1.9% and China Resources Land lost 1.4%.

Japanese stocks ended higher, led by gains in auto and tech stocks, as concerns ease over rising costs of fuel and raw materials. Toyota Motor added 2.7% and medical-information platform operator M3 gained 4.6%. The Nikkei Stock Average rose 1.1%. The 10-year Japanese government bond yield falls half a basis point to 0.245% as the Bank of Japan conducts fixed-rate bond-buying operations to limit yield gains. Investors remain focused on the war in Ukraine and its trade implications as Russia and Ukraine prepare to hold cease-fire talks in Turkey.


European markets rose amid hopes of a diplomatic solution to the war in Ukraine. The pan-European Stoxx Europe 600 gained 1.7%, led by strength among automakers. Shares in BMW rose 5.6% while Volkswagen group added 5.1%.

In London, the FTSE 100 on Tuesday closed up 0.9% as a result of increasing optimism in relation to Russia and Ukraine reaching a diplomatic solution to Russia's continuing invasion of Ukraine.

"Today's market has the feel of trades being unwound, as short positions in stocks are closed, and latecomers to the oil rally are chased out, following news that Russia was continuing to scale back operations around Kiev and that talks between the two sides continued to provide some progress," IG says.

North America

Stocks rose and oil prices recorded their largest declines in more than a week Tuesday as US indexes moved closer to finishing a month in the green for the first time this year.

Falling oil prices lifted the S&P 500's consumer discretionary sector about 1.5% and pushed its energy sector down about 0.4%. Lower energy costs often assuage investors' concerns about growth because consumers have more disposable income when they pay less at the pump.

The technology-heavy Nasdaq Composite led the major indexes, closing higher by 264.73 points, or 1.8%. The Dow Jones Industrial Average added 338.30 points, or about 1%, while the S&P 500 rose 1.2%. On Monday, major indexes rose after a choppy session, with tech stocks leading the gains.

Stocks have rallied in recent weeks, reversing much of the losses that came in the wake of Russia's invasion of Ukraine. Investors have shown calm despite concerns including multidecade-high inflation, fresh Covid-19 lockdowns in China and a Federal Reserve that has begun raising interest rates for the first time since 2018.

All three US indexes are on track to finish March in positive territory. The Nasdaq has led the way, rising 6.3% so far this month.

"Markets seem to have become much more comfortable with the idea that the hiking cycle is here, that it won't derail economic growth and that equity markets are still the place to be," said Altaf Kassam, head of investment strategy for Europe, the Middle East and Africa at State Street Global Advisors.

Investors were monitoring peace talks between Russia and Ukraine, which resumed in Istanbul Tuesday for the first time in two weeks. Ukraine has in recent days signaled an openness to a neutral status as part of a peace deal with Russia. The talks were described by both sides as constructive and Russian officials said they would "dramatically" reduce military activities around Kyiv and Chernihiv to “create the necessary conditions for future negotiations”. 

"Today, Ukraine looks better and buyers are back," said Mike Bailey, director of research at FBB Capital Partners. "Whether it's true or not, investors are going with what they see in the headlines."

In commodity markets, Brent crude, the international oil benchmark, fell about 2% to settle around $110.23 a barrel, down from the $123.70 recorded earlier this month. Its US equivalent, West Texas Intermediate, lost 1.62% to settle at $104.24 a barrel.

Oil prices rose after Russia's invasion of Ukraine, when Western boycotts and sanctions imposed on Russia began to weigh on world-wide supply. A wave of Covid-19 lockdowns in China is expected to reduce global fuel demand, which could help push oil prices down further from recent highs.

Nielsen Holdings surged 20.1%, or $4.52, to close at $26.72 after The Wall Street Journal reported that a consortium led by Elliott Management and Brookfield Asset Management were close to buying the company for around $16 billion.

LHC Group shares gained 5.9%, or $9.33, to $166.56 after UnitedHealth Group said it would acquire the home-health company for $5.4 billion. Shares of Robinhood closed up 24.2%, or $3.10, to $159.91 after the online brokerage said it would extend trading hours for users in an attempt to combat slowing growth.

In economic news, the Labor Department on Tuesday reported 11.3 million job openings in February, down slightly from January and December's record. Private-sector employers had 11.2 million openings on March 18, according to jobs side Indeed.

Yields on two-year US Treasurys briefly surpassed yields on the 10-year benchmark note on Tuesday for the first time since 2019. Government bonds with longer terms typically offer higher yields.

When the shorter-dated bond's yield rises above that of the longer-dated 10-year, it is known as a yield curve inversion. A reflection that interest rates are likely to be lower over the longer term than the short term assuming an eventual slowdown in inflation, it is sometimes considered an indicator of a coming recession.

"There have been more yield curve inversions than recessions but every time there is a recession you can look back and find a yield curve inversion," said Mr. Kassam.

The yield on the 10-year note slipped to 2.399% from 2.476% on Monday, its largest single-day decline since March 4.

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

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