Global Market Report - 6 September
The Australian market is set to open higher as futures gain.
Australian shares are set to edge higher. Wall Street was closed for Labor Day.
ASX futures were up 16 points or 0.23% at 6847 as of 5:00am on Tuesday, pointing to a gain at the open.
US markets were closed on account of Labor Day.
In commodity markets, Brent crude oil rose 2.92% to US$95.74 a barrel, gold edged down 0.12% to US$1,710.10.
In local bond markets, the yield on Australian 2 Year government bonds was at 2.68% while the 10 Year was 3.64%. Overseas, the yield on 2 Year US Treasury notes was at 3.39% and the yield on the 10 Year US Treasury notes was at 3.19%.
The Australian dollar hit 67.98 US cents down from the previous close of 68.10. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged up to 101.12.
Chinese shares had a mixed session, as investors digested Caixin services PMI data and the implications of the country's drought-driven power crunch. The benchmark Shanghai Composite Index rose 0.4% to 3199.91, the Shenzhen Composite slipped 0.1% to 2088.09 and the ChiNext Price Index gained 0.2% to 2538.20. Concerns over the country's Covid-19 outbreaks are likely to persist as authorities implement wider lockdowns in various cities. "Covid-19 disruptions to business activity and sales execution will also dampen consumer sentiment, while buyers' expectation of weaker property prices will delay property purchases," Moody's analyst Daniel Zhou says. Stocks of Chinese liquor companies were lower, with Kweichow Moutai dropping 2.1% and Wuliangye Yibin falling 1.7%.
Hong Kong's Hang Seng Index lost 1.2% to 19225.70, its lowest close in more than five months, as widening Covid-19 curbs in China weighed on sentiment. BYD was among top laggards with a 5.9% fall, ending lower for six straight sessions, after Warren Buffett's Berkshire Hathaway further pared its stake in the auto maker. Its peer, Geely Auto, also slid 7.0%. Among tech shares, Alibaba Group and Tencent Holdings weakened 2.4% and 2.9%, respectively. But coal miners advanced amid energy supply tightness, driven by pandemic disruptions and high temperatures in parts of the country. Yankuang Energy surged 12% to an all-time closing high and China Shenhua Energy gained 3.8%, while Cnooc, PetroChina and Sinopec added 1.9%-2.5%.
Japanese stocks ended lower, dragged by falls in auto and food stocks, as concerns persisted over the higher costs of fuel and other materials. Denso Corp. dropped 2.1% and Suntory Beverage & Food lost 2.0%. Meanwhile, gains in energy stocks helped offset some of the market's losses. The Nikkei Stock Average declined 0.1% to 27619.61. The focus is on the OPEC+ meeting later in the day and its implications for crude-oil prices. USD/JPY was at 140.42, compared with 140.21 late Friday in New York. The 10-year Japanese government bond yield fell half a basis point to 0.230%.
European indices ended the day lower. The pan-European STOXX Europe 600 Index was down 2.58 points or 0.62% today to 413.39, the German DAX was down 289.49 points or 2.22% today to 12760.78, while the French CAC 40 was down 74.29 points or 1.20% today to 6093.22.
Meanwhile, in London, the FTSE 100 Index drops 1.2%, or 87 points to 7193 as losses for industrial stocks outweigh gains for oil and mining shares. Packaging groups Smurfit Kappa, DS Smith and Mondi are among the biggest losers, alongside the likes of chemical companies Croda International and Johnson Matthey, steam-systems maker Spirax-Sarco Engineering and industrial-turnaround specialist Melrose Industries.
Still, Harbour Energy, BP and Shell are among a handful of risers as Russia's decision to suspend gas supplies to Europe through the Nord Stream 1 pipeline boosts Brent crude by 2.7% to $95.50 a barrel. Miners Glencore, BHP, Rio Tinto, Antofagasta and Anglo American also advance as precious and base-metal prices mostly increase.
The US Markets were closed yesterday for Labor Day, however US stock futures gained. Contracts linked to the S&P 500, Dow Jones Industrial Average and Nasdaq-100 all rose.