Australia

Australian shares are set to open higher today following mixed sessions in the US and Europe. Oil prices jumped after a surprise announcement from OPEC, sending energy stocks higher. Meanwhile, March PMI data suggests a contracting US manufacturing sector, and possibly a slowdown in economic growth.

ASX futures were hinting higher as of 7:00am on Tuesday, having gained 6 points or 0.1%.

US stocks ended mixed on the first day of the second quarter as investors interpreted weaker-than-expected manufacturing data and a spike in oil prices.

The S&P 500 advanced 0.4% and the Dow Jones added 1%, while the Nasdaq Composite was off by 0.3%.

US stocks are coming off a tumultuous first quarter in which the major indices proved fairly resilient in the face of a banking crisis that caught the financial world by surprise in March. All three major stock indices finished the first three months of the year with gains.

A surprise announcement over the weekend of oil production cuts led to a jump in crude prices, coloring market action Monday. The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, said Sunday they would cut more than a million barrels of output a day starting next month.

In commodity markets, Brent crude oil shot up 6.3% to $US84.92 a barrel while gold edged up 0.7% to US$1,983.48.

Australian government bonds edged higher, with the 2 Year yield climbing to 2.98% and the 10 Year increasing to 3.32%. US Treasury notes were lower, with the 2 Year yield declining to 3.98% and the 10 Year dipping to 3.43%.

The Australian dollar edged up to 67.79 US cents from its previous close of 66.84. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, leaned lower to 95.80.

Asia

Stocks in China finished higher, extending last week's rally on upbeat official PMI data. Tech companies including storage-chip makers and security-software developers led the gains. Biwin Storage Technology jumped 18% and cybersecurity firm China Greatwall Technology rose 10%. Analysts broadly expect the market to sustain the uptrend in the coming months, anticipating strong Q1 earnings on the post-reopening economic normalization. The benchmark Shanghai Composite Index rose 0.7% to settle at 3296.40. The Shenzhen Composite Index rose 1.1% to 2149.02, while the ChiNext Price Index was the top performer, advancing 1.7% to 2440.21.

Hong Kong's benchmark Hang Seng Index ended flat at 20409.18. China's Caixin manufacturing PMI for March came in much lower than for February, signaling that manufacturing activities lost momentum. The indicator, which mostly tracks small and medium-size privately owned enterprises, fell to 50.0. The Hang Seng Tech Index was flat, with shares of tech companies diverging. Meituan and Baidu dropped 2.4% and 2.1%, respectively, while Tencent Holdings added 0.6%. Semiconductor Manufacturing International Corp. rose 7.5% and China Overseas Land & Investment advanced 7.0%.

Japanese stocks ended higher, led by gains in tech shares. Nomura Research Institute gained 3.3% and M3 climbed 3.1%. Inpex jumped 5.5% and Eneos Holdings ascended 3.2% following news that a group of large oil producers led by Saudi Arabia plan to cut output. The Nikkei Stock Average rose 0.5% to 28188.15.

India's benchmark Sensex closed 0.2% higher at 59106.44, tracking broad gains among Asian equities. "Investors are likely to remain positive as a slowdown in US consumer prices has increased hopes that the Fed will pause further increases in interest rates," ICICI Securities analysts said in a note. Among lenders, IndusInd Bank gained 1.0%, Axis Bank rose 0.7% and ICICI Bank added 0.8%. Among auto stocks, Maruti Suzuki gained 2.5% and Mahindra & Mahindra rose 1.2.

Europe

European stocks traded mixed as investors reacted to the unexpected announcement by OPEC+ that it will cut oil production. The pan-European Stoxx Europe 600 dipped 0.1% and the German DAX lost 0.3%, while the French CAC 40 climbed 0.3%. Energy stocks rallied while airline shares fell following an increase in oil prices due to the OPEC+ decision. Banks gained as higher oil prices fueled inflation concerns, supporting the case for further interest rate rises by central banks.

"The move by OPEC+ is particularly unhelpful for central banks who, while being worried about sticky inflation, are becoming increasingly concerned about pushing rates up from their current levels," CMC Markets analyst Michael Hewson wrote.

The FTSE 100 led European indices Monday, advancing 0.5%. The index started Q2 on a positive note after OPEC+ announced production cuts, which boosted oil heavyweights Shell and BP, both adding more than 4%.

"While the rise in energy prices has helped the energy sector, the rise in yields is also helping to boost the banks, with the likes of Barclays, Standard Chartered, and Lloyds leading the gains here," CMC Markets analyst Michael Hewson explained. Higher energy prices proved to be a drag on travel and leisure stocks, however, with airline shares slipping, he said.

North America

US stocks ended mixed on the first day of the second quarter as investors interpreted weaker-than-expected manufacturing data and a spike in oil prices.

The S&P 500 advanced 0.4% and the Dow Jones added 1%, while the Nasdaq Composite was off by 0.3%.

US stocks are coming off a tumultuous first quarter in which the major indices proved fairly resilient in the face of a banking crisis that caught the financial world by surprise in March. All three major stock indices finished the first three months of the year with gains.

A surprise announcement over the weekend of oil production cuts led to a jump in crude prices, coloring market action Monday. The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, said Sunday they would cut more than a million barrels of output a day starting next month.

The rise in oil prices boosted shares of energy companies. The S&P 500 energy sector added 4.9%, the best-performing segment of the S&P 500. Exxon Mobil jumped 5.9% and Chevron climbed 4.2%.

Higher oil prices reignited concerns on Wall Street about inflation and the Federal Reserve's interest rate increases designed to tamp down elevated costs.

"The fight on inflation is not over. If inflation from energy prices starts to rebound again, that won't be a good scenario for central banks, " said Luc Filip, head of investments at SYZ Private Banking.

Meanwhile, new data showed a slowdown in economic activity in the manufacturing sector. The Institute for Supply Management's purchasing managers' index (PMI) dropped to 46.3% in March from 47.7% the month prior. Economists polled by The Wall Street Journal expected a reading of 47.3%.

That marked the fifth month the index has been below 50, the dividing line between manufacturing expansion and contraction, and the lowest level since May 2020. The ISM says that readings below 48.7, over time, are usually an indication the overall economy is contracting.

"The whole report is uniformly weak and really is ammunition for the bearish camp, the people who think a recession is coming," Huw Roberts, head of analytics at Quant Insight, said of the ISM data.

Elsewhere, shares of auto manufacturers declined Monday as car payments grew more expensive in the first quarter amid elevated interest rates. In the first quarter, the average loan payment for a new automobile was $730 a month, about $75 higher than the period last year, according to Edmunds, a car-buying research firm.

At the same time, inventory levels for new vehicles have begun to bounce back, leading many car companies to report higher US auto sales in Q1. Tesla on Sunday announced it delivered a record number of vehicles in the first three months of the year, when the company cut prices to increase demand.

Shares of Tesla Inc. fell 6.1%, one of the worst-performing stocks in the S&P 500 on Monday. Rivian Automotive Inc. fell 1.6% while shares of General Motors Co. lost 1.1%.