The ASX looks set to fall 20 points or 0.3% today, as ASX Futures predict a further slide for the ASX200 after reaching a new 20-day low yesterday.
US markets all fell overnight, applying pressure to the Australian bourse as mega-cap tech stocks led the fall. Apple, Alphabet and Amazon all lost between 0.5% and 1%.
Tesla also slid 2% as the EV manufacturer cut the price of its popular Model Y EVs in Germany, and mining and engineering giant Caterpillar shed 3% alongside retail pharmacy chain Walgreens Boots Alliance.
The S&P500 suffered as a lack of optimism on interest rate cuts applied pressure to real estate – Boston Properties and Healthpeak Properties were both down 3% in yesterday's trading.
The Dow Jones index fell by 94 points or 0.3%, the S&P 500 index slipped 0.6% and the Nasdaq index shed 89 points or 0.6%.
European markets were worse off, courting a six-week low with the biggest single-percentage fall in one day since October last year. Echoing the US, the real estate sector suffered overnight, losing 2.9%.
European Central Bank (ECB) president Christine Lagarde emphasised inflation was not under control yet, but that the EU was on track to return inflation to its 2% target.
The UK’s CPI rose this month, for the first time since February, rising from 3.9% in November to 4.0% in December.
The FTSE300 lost 1%, while the FTSE100 shed 1.5%.
Commodities and currencies
The US Dollar gained overnight; the Euro fell from US$1.0882 to US$1.0843 and was trading near US$1.0880 at close, while the Aussie dropped from US65.71 cents to US65.50 cents and the Japanese Yen slipped from 147.33 yen per US dollar to JPY148.50, settling near JPY148.20 at the close of US trading.
Oil prices were volatile overnight, caught between opposing market forces. China’s fourth-quarter economic growth fell below expectations, pressuring prices down on fears of low demand, while OPEC predicted a strong increase in global oil demand by 2025 that would exceed supply.
Brent crude fell by US41 cents, or 0.5%, to US$77.88 a barrel, while US Nymex crude saw a marginal increase of US16 cents, or 0.2%, to US$72.56 a barrel.
Base metals fell as the US dollar strengthened. Copper futures dropped by 0.9% and aluminium futures decreased by 0.6%, impacted by China's less-than-expected economic recovery.
Gold futures fell by US$23.70, or 1.2%, to US$2,006.50 an ounce on Wednesday. Spot gold was trading near US$2,005 an ounce at the close of US markets.
Iron ore futures declined by US96 cents, or 0.7%, to US$135.79 a tonne on Wednesday.
China's crude steel output plunged 15% year-on-year in December and home prices experienced their most significant drop in nearly nine years last month, indicating a weakened demand for steel.
On the small cap front
The Small Ordinaries index fell 0.5% yesterday, closely mirroring the ASX200’s 0.4% drop.
You can read about the following and more throughout the day.
- Elixir Energy Ltd (ASX:EXR, OTC:ELXPF) has logged positive results for the Daydream-2 appraisal well in its 100%-owned Grandis Gas Project, having identified a deep reservoir of much higher quality than expected.
- Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) has received the Large Scale Mining Licence for the Makuutu Heavy Rare Earths Project in Uganda after the Minister of Energy and Mineral Development signed and issued the permit, a vital milestone for the company.
- Astral Resources NL (ASX:AAR) has encountered more broad gold intersections in drilling at the Theia deposit of the Mandilla Gold Project, with results up to 29 metres at 2.79 g/t gold from 324 metres, including an intersection of 0.3 metres at 139 g/t gold from 238.85 metres.