Opening Call: The Australian share market is to open higher.
U.S. stocks again hit records after the Fed scaled back bond-buying. The yield on the 10-year Treasury note climbed 3.1 basis points to 1.577%, compared with 1.546% on Tuesday. The WSJ Dollar Index fell 0.24% to 88.32. U.S. oil futures fell to their lowest finish since October. Gold futures settled lower after better-than-expected ADP jobs data.
Australian Market
Australia’s S&P/ASX 200 index closed 0.9% higher, bouncing off a three-week low a day after the country’s central bank tempered expectations about the speed at which interest rates will rise. The tech sector dropped into negative territory while every other sector rose, led by the heavyweight financial and materials sectors.
US Market
Broad U.S. stock indexes notched fresh highs after the Federal Reserve approved plans to begin scaling back its bond-buying stimulus program this month. The S&P 500 hit session highs after Chairman Jerome Powell’s postmeeting press conference. All three major indexes set-closing records.
The S&P 500 rose about 0.7%, while the Dow Jones Industrial Average edged up roughly 0.3%. The technology-heavy Nasdaq Composite Index outperformed its peers, gaining around 1%. On Tuesday, the Dow closed above 36000 for the first time. “It was more dovish than markets expected,” said Mona Mahajan, senior investment strategist at Edward Jones, of the Fed meeting. “Anytime there’s a whiff of lower rates, we tend to get favourable market reactions.”
The Tokyo Stock Exchange was closed for the Culture Day holiday. Chinese stocks finished mixed, as the new-energy sector and automakers declined, while property developers and coal miners rebounded. The Shanghai Composite Index dropped 0.2%, the Shenzhen Composite Index edged 0.1% higher, and the ChiNext Price Index lost 0.4%.
Commodities
Gold futures settled lower after the ADP private-sector jobs report saw employment increase more than expected but then found some support after the Federal Reserve announced plans to taper its bond-buying program, as expected. December gold fell 1.4% to settle at $1,763.90 an ounce on Comex ahead of the Fed news. In electronic trading after the announcement, prices were at $1,765.
Oil Futures
Oil futures posted their lowest finish since October after official U.S. government data showed an increase in domestic crude inventories for a second week in a row. West Texas Intermediate crude for December delivery fell 3.6% to settle at $79.88 a barrel on the New York Mercantile Exchange. January Brent crude, the global benchmark, fell 3.2% at $81.99 a barrel on ICE Futures Europe. “Ongoing subdued refining activity has led to another crude inventory build, despite ongoing strength in exports,” said Matt Smith, lead oil analyst, Americas, at Kpler, in emailed comments.
Forex
Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1561 to highs near US$1.1615 and was near US$1.1605 at the US close. The Aussie dollar lifted from lows near US74.15 cents to highs near US74.58 cents and was near US74.50 cents at the US close. But the Japanese yen eased from 113.71 yen per US dollar to JPY114.18 and was near JPY114.00 at the US close.
European Markets
European sharemarkets were mixed on Wednesday. The pan-European STOXX 600 index rose by 0.4% to record highs with basic resources stocks up 0.9%. The German Dax rose by less than 0.1%. But the UK FTSE index fell by 0.4% ahead of the Bank of England policy decision on Thursday. In London trade shares in Rio Tinto were broadly flat and BHP shares lifted by 0.8%.
Asian Markets
The Tokyo Stock Exchange was closed for the Culture Day holiday. Chinese stocks finished mixed, as the new-energy sector and automakers declined, while property developers and coal miners rebounded. The Shanghai Composite Index dropped 0.2%, the Shenzhen Composite Index edged 0.1% higher, and the ChiNext Price Index lost 0.4%.
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