Wall Street’s volatility continued overnight with US markets suffering another day of losses. With that in mind, we can expect the ASX to dip as well.
Here’s what we know:
- The Aussie dollar rose from lows near US71.85 cents to highs near US72.55 cents and was near US72.25 cents at the US close.
- Global oil prices ended mixed on Thursday but off the day's lows after China indicated it was prepared to buy more oil and energy supplies.
- The Brent crude price fell by US12 cents or 0.2% to US$78.52 a barrel.
- Base metal prices fell on Thursday by between 1.7-4.2% with lead down the least and tin down the most.
- The gold futures price rose by US$34.10 an ounce or 2.0% to U$1,757.00 an ounce.
- Spot gold was trading near US$1,756 an ounce at the US close.
- Iron ore rose by US$3.45 a tonne or 3% to US$118.25 a tonne.
Here’s how the markets performed in the last quarter.
- The S&P/ASX200 rose 0.3%.
- The S&P500 index rose 0.2%.
- The Nasdaq fell 0.4%.
- The Australian dollar fell 3.6%.
- West Texas intermediate crude rose 2.2%.
- The spot gold price fell 0.7%.
- 3-month copper fell 2.4%.
Australian market
Australian shares brushed off worries about global economic instability to finish Thursday’s session up 1.9% to 7,332.2.
The gains were led by banking and mining stocks, while a spike in iron ore futures helped BHP to gains of 3.5% and Rio Tinto to 3.4%.
South32 was also a winner, gaining 4.1% to $3.53 after the business confirmed it would increase its stake in the Mozal aluminium project in Mozambique for $US250 million.
While most sectors rallied yesterday and the ASX200 tried to claw back losses sustained during Tuesday and Wednesday’s trading days, the index still finished the month of September down 2.6%.
The start of October is also set to be down.
Morgan Stanley (NYSE:MS) has hinted the S&P/ASX 200 could dip below 7,000, stating there are "signals flashing" on rates, commodities and valuations.
A fall to 7,000 would mark an 8% fall from the record high of 7,629 set last month.
“Globally, the near-term signals from activity data are weaker, and the leadership from US equities is forecast to fade," says Morgan Stanley equity strategist Chris Nicol.
"The moves in yields are pressuring valuations.
"This, combined with a clear rolling over in earnings for our market and some risks around AGM updates keeps us similarly cautious on index direction – a move below the 7,000 level would not surprise us.”
Australian indices
- ASX 200 rose 1.88% to 7,332.20.
- ASX24 futures fell 1.7% to 7,174.
- S&P/ASX Small Ordinaries rose 1.24% to 3,472.90.
- All Ordinaries was stable at 7,629.40.
US markets
Joseph Palmer & Sons director, Alex Moffatt tells us “Bond yields fell last night, probably for no other reason than they had risen too far too quickly, and some fresh buying emerged. That the number of Americans filing for unemployment benefits increased in the latest week would also have been taken as a sign the jobs market may be softening.
“The American debt ceiling issue seems to have been kicked down the road with a deal approved in the Senate for funding into the new fiscal year which begins today.
“In other news, analysts are variously forecasting US corporate profits to have surged by 28% during the September quarter.”
US indices
- Dow Jones fell 1.6% to 33,843.92.
- S&P 500 dropped 1.2% to 4,307.54.
- Nasdaq fell 0.4% to 14,448.58.
European markets
Markets eased on Thursday, however, the solid 2% lift in the mining sector balanced a 2.2% fall in the travel & leisure sector.
Reuters reported that "British online fashion retailer Boohoo tumbled 15.1% as it warned that freight inflation and higher wages for its distribution centre workers would impact full-year profit margins."
In London trade, shares in Rio Tinto rose by 1.9% and shares in BHP rose by 1.4%.
European indices
- STOXX 600 fell 0.048% to 454.81.
- German Dax fell 0.7%% to 15,260.69.
- UK FTSE fell 0.3% to 7,086.42.