Global Fundamental Analysis 17/11/2021

Australian Market

Australia’s S&P/ASX 200 index closed 0.7% lower after the central bank governor said he expected inflationary pressures to ease and interest rates to remain low for some time. The materials sector was the biggest loser amid weakness in metals prices. Shares in energy companies also fell. Tech was the only sector not to fall, gaining 0.2%.

US Market

U.S. stocks rose after a consumer-spending report raised hopes for the holiday sales season. The S&P 500 rose 0.4%, reversing Monday’s declines and leaving it just short of last week’s closing high. The Dow Jones Industrial Average, which fell three of five days last week, added 0.2%. The technology-focused Nasdaq Composite Index climbed 0.8%. Retail sales rose 1.7% in October, the Commerce Department said, suggesting consumers weren’t put off buying by rising inflation. Walmart and Home Depot reported higher sales.

Commodities

Gold futures ended lower, after touching their highest intraday price in five months, as investors digested the latest U.S. economic data — which included a rise in October retail sales despite high inflation — and a monthly surge in industrial output. December gold fell 0.7% to settle at $1,851.20 an ounce, after touching a high of $1,879.50, the highest intraday level for a most-active contract since June 14, FactSet data show.

Oil Futures

Oil futures ended on a mixed note, with U.S. prices settling at their lowest in over a week, but global benchmark crude posting a gain after back-to-back session declines. West Texas Intermediate crude for December delivery fell nearly 0.2%, to settle $80.76 a barrel on the New York Mercantile Exchange, the lowest front-month contract finish since Nov. 4, according to Dow Jones Market Data. January Brent crude the global benchmark, rose 0.5% at $82.43 a barrel on ICE Futures Europe.  

Oil found support after comments from U.S. House Majority Leader Steny Hoyer lowered expectations that the U.S. will tap the Strategic Petroleum Reserve to help lower gasoline prices. However, the International Energy Agency said it expects growth in crude-oil production to help ease tight global supplies, putting some pressure on prices.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from US$1.1385 to lows near US$1.1310 and was near lows in afternoon US trade. The Aussie dollar fell from highs near US73.55 cents to lows near US72.95 cents and was near session lows in afternoon US trade. And the Japanese yen fell from 114.10 yen per US dollar to JPY114.85 and was near the weakest levels in afternoon US trade.

European Markets

European share markets were firmer on Tuesday. Dutch technology investor Prosus rose 4.2% after forecasting higher profits for the first half of 2022. And French luxury group Kering gained 4.4% after its top brand Gucci said it expected 2021 revenues to be in line or higher than their pre-pandemic level. The pan-European STOXX 600 index rose by 0.2% to record highs. The German Dax index rose by 0.6%, also to record highs. But the UK FTSE index fell by 0.3%. In London trade shares in Rio Tinto and BHP, both fell by 1.3%.

Asian Markets

Japan’s Nikkei Stock Average edged 0.1% higher after Chinese President Xi and U.S. President Biden cooled tensions in their virtual meeting. A mixed bag of stocks led the gains, with NEXON jumping 6.3%, Subaru climbing 5.2% and Pan Pacific International Holdings gaining 3.5%. Chinese stocks ended the session lower, extending Monday’s downturn.

The drop came despite a virtual meeting earlier in the day between the U.S.and Chinese presidents. The benchmark Shanghai Composite Index fell 0.3% while the Shenzhen Composite Index lost 0.5%. The ChiNext Price Index edged down 0.2%. Commodities sectors, including steelmakers, metal producers and coal miners, led the losers as commodity prices have been under pressure in recent weeks.