The ASX closed 0.4% higher, to 7,273.8 yesterday, despite the 1.4% bloodbath that was predicted.
Gains were helped along by a near 10% spike in energy infrastructure operator AusNet Services Ltd after a bidding war erupted for the business.
With that said, the market is again predicted to open lower today, however, what happens during the day is very much a wait and see scenario.
We know that Wall St was mixed, however, the fear surrounding China property giant Evergrande’s collapse seems to be easing.
Oil may also affect markets in the coming days as global oil prices edged higher on concerns about the consumption outlook counterbalanced efforts by OPEC+ producers to pump enough supply to meet growing demand.
Here’s what we saw:
- The Brent crude price rose by US44 cents or 0.6% to US$74.36 a barrel.
- Aluminium fell 0.7%.
- Copper fell 0.7% fell in relation to the possible fallout from Evergrande Group's debt crisis. Zinc shed 1.3%.
- Gold futures lifted US$14.40 an ounce or 0.8% to U$1,778.20 an ounce.
- Spot gold was trading near US$1,774 an ounce at the US close.
- Iron ore was unchanged at a 16-month low of US$94.00 a tonne.
Australian markets
We should see a fall on the ASX this morning, given the performance of Wall St and Euro markets.
There will be further downside risk as China returns from a two-day break.
We will also see if RBA Deputy Governor Guy Debelle’s parliamentary testimony from 1015am AEST and RBA Assistant Governor Michell Bullock’s speech on the Housing Market and Financial Stability at 1200pm AEST has an impact.
Meanwhile, Melbourne experienced an earthquake this morning – reportedly 5.8 on the Richter scale – which may cause protestors to stop and think about any mayhem today.
The property industry in Melbourne is expected to face a $2 billion hit, following the two-week shutdown of the construction industry.
It comes just as the apartment sector was coming back to life and listed companies such as Lendlease, Charter Hall and Mirvac were in the midst of building major city towers.
Housing developers including Stockland (ASX:SGP) and a series of private companies also have apartment and housing projects on the go.
Some in the industry have accused the Victorian Government of fearmongering, with Luxury property developer Tim Gurner saying that while health is the number one priority, “at the same time the cost of this inefficiency on sites, and closures for trades, developers and builders is immense, and is going to hurt for many.
“It is essential that we see some strong leadership from the government now to lead the way out of this crisis and be a positive influence, rather than fearmongering,” he said.
The Property Council of Australia’s Victorian executive director Danni Hunter called out the current protests but said government and industry must work together.
“Closing the industry will prevent them going to work and getting paid and it will stall projects, causing immensely costly delays, putting projects and Victorian jobs at risk,” Ms Hunter said.
The shutdown does put Victoria’s economic recovery at risk.
Whether it drags the sectors down on market is another question.
Australian indices
- ASX 200 fell 0.31% to 7,247.50
- ASX24 futures fell 0.2% to 7,226
- S&P/ASX Small Ordinaries fell 0.20% to 3,425.30
- All Ordinaries fell 0.35% to 7,540.90
US markets
Wall St was lower despite a small rally on Tuesday when it valiantly tried to pare back its slump.
Investors are cautious and are anxiously awaiting the conclusion of the Federal Reserve’s two-day meeting, which will happen overnight, however it has been Evergrande causing most concern.
“The market is not very afraid of the Fed. It is looking to see how the Evergrande situation plays out and if there could be negative implications for the emerging markets and the global market,” Peter Cardillo of Spartan Capital Securities said.
On the company front, Adobe announced its Q3 earnings.
Here’s what eToro analyst Josh Gilbert had to say about it.
"Adobe announced its Q3 earnings today of US$3.11 per share on revenue of US$3.94 billion, compared to analyst expectations of US$3.08 per share on revenue of US$3.89 billion.
“As corporate marketing budgets increase thanks to the global economic recovery gaining momentum, Adobe continues to benefit from the demand in its creative, marketing and analytics software products. As a result, the company achieved record revenue in Q3 which increased by 22% year-over-year, whilst digital media sales grew by 23% year-over-year.
"The report illustrates another first-class quarter for Adobe with growth across all sectors of the business. Shares have climbed around 29% so far year-to-date.
“The rise of social media influencers and digital promotions on social media apps in the last two years has been a major catalyst of Adobe’s recent user growth acceleration. In particular, as businesses and consumers increasingly use apps such as TikTok and Instagram for content creation, Adobe’s Photoshop software and creative tools are becoming essential applications.
“The company’s stock fell around 4% after hours, with investors disappointed by the provided future guidance for Q4.
"The future guidance highlights Adobe’s expectation of US$4.07 billion in revenue in Q4, which would represent a 19% rise, slowing the rate of growth. However, Adobe is prone to outperform earnings expectations, so this sell-off could potentially open up opportunities for investors."
US indices
- Dow Jones fell 0.2% to 33,919.84
- S&P 500 dropped 0.1% to 4,354.19
- Nasdaq fell 0.2% to 14,746.40
European market
Not a bad day in Europe, rising on Tuesday.
It was led by British sports betting company Entain surging 18% on reports that US rival DraftKings made a US$20 billion takeover offer for the company.
Shares in Rio Tinto slid 0.1%, but shares in BHP gained 0.4%.
European indices
- STOXX 600 rose 1% to 458.68
- German Dax rose 1.4% to 15,348.53
- UK FTSE rose 1.1% to 6.980.98