Global Fundamental Analysis

Opening Call: The Australian share market is to open lower.

U.S. stocks posted modest gains, which took the Nasdaq Composite and S&P 500 to fresh records. The 10-year Treasury note yield edged up to 1.489%, from 1.478% on Monday. The WSJ Dollar Index rose 0.19% to 86.77. U.S. oil prices eked out gains as investors assess the demand outlook. Gold prices declined to a mid-April low.

Australian Market

Australia’s S&P/ASX 200 index closed essentially flat for a second straight day, paring early losses racked up amid the spread of Covid-19 lockdowns across the country.

The benchmark finished less than 0.1% lower as gains in the tech, health and financial sectors mostly offset weakness among commodity and utility stocks.

The ASX 200 had been as much as 0.9% lower in early trade as the western city of Perth and Queensland state followed Sydney into lockdown.

US Market

U.S. stocks edged up in a choppy trading session that saw modest gains in economically sensitive and growth stocks alike.

The S&P 500 ticked up less than 0.1%, as shares of home builders, energy stocks and technology companies rose. The gains were enough for the index to close at its 33rd record of the year – a figure that ties the number seen in all of 2020.

The Dow Jones Industrial Average also rose, gaining less than 0.1%. The Nasdaq Composite added 0.2% to close at a record high, after wobbling between gains and losses earlier in the day.

Commodities

Gold futures finished sharply lower but avoided a more pronounced decline for the commodity that saw it tumble by as much as 1.7% at the session’s nadir.

August gold slumped 1% to end at $1,763.60 an ounce and touching an intraday low at $1,750.10 after bullion climbed 0.2% on Comex on Monday. At the height of Tuesday’s selling, bullion was on track for the worst monthly decline, down more than 8% in June to date, since 2013.

Oil Futures

Oil futures ended a choppy session with small gains, after flipping between positive and negative territory, as investors monitored a pickup in the spread of the delta variant of the virus that causes Covid-19 and awaited an OPEC+ decision on whether to further lift curbs on crude production.

West Texas Intermediate crude for August delivery rose less than 0.1% to finish at $72.98 a barrel on the New York Mercantile Exchange. September Brent crude, the global benchmark, rose 0.2% to end at $74.28 a barrel on ICE Futures Europe.

Forex

Major currencies were generally weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1920 to lows near US$1.1880 and was near US$1.1900 at the US close. The Aussie dollar fell from highs near US75.65 cents to lows near US75.05 cents and was near US75.15 cents at the US close. But the Japanese yen rose from 110.75 yen per US dollar to JPY110.40 and was near JPY110.55 at the US close

European Markets

European sharemarkets rose modestly on Tuesday. Euro-zone economic sentiment hit a 21-year high in June. And the German market outperformed, boosted by Adidas (+2.5% to a record high) after the sportswear maker said it will launch a new share buyback programme worth up to 550 million euros (US$654 million). The pan-European STOXX 600 index rose by 0.3%. The German Dax index lifted by 0.9%. The UK FTSE index rose by 0.2%. In the London trade, shares in both Rio Tinto and BHP rose by 0.4%.

Asian Markets

Japan’s Nikkei Stock Average closed 0.8% lower, as declines in energy and steel stocks offset gains in some electronics makers.

Chinese stocks ended the session lower, dragged by industrial and telecom shares. The Shanghai Composite Index fell 0.9%, the Shenzhen Composite Index lost 0.9%, and the ChiNext Price Index was 0.2% lower.