The ASX is expected to open higher this morning as Wall St rallied after US debt woes subsided.
ASX Futures point to a gain of 0.5%.
In fact, stock indices around the globe all closed higher yesterday as buyers moved back into the market in search of bargains.
Here’s what we know:
- The Aussie dollar rose from lows near US72.70 cents to highs near US73.23 cents and was near US73.10 cents at the US close.
- Global oil prices rebounded on Thursday after the US Department of Energy said it has no plans "at this time" to tap into the nation's oil reserves to help quell rising gasoline prices.
- The Brent crude price rose by US87 cents or 1.1% to US$81.95 a barrel.
- Base metal prices were mostly higher on Thursday.
- Copper was up 2.6% and led gains as investors weighed global growth prospects before key US jobs data and the return of Chinese traders after a holiday.
- Aluminium lifted 1.6%.
- Lead was up 1.5%.
- Tin fell 0.2%.
- The gold futures price fell by US$2.60 an ounce or 0.1% to U$1,759.20 an ounce.
- Spot gold was trading near US$1,755 an ounce at the US close.
- Iron ore was again unchanged at US$117.80 a tonne with China on holiday until yesterday.
The Australian market
It was a good day on the ASX yesterday, with shares climbing on the back of optimism that the US would solve its debt ceiling woes.
That optimism proved right as the S&P/ASX 200 finished the session 0.7% higher to 7256.7.
Technology stocks led the way with gains of 2.3%.
Of the miners, BHP could be a big winner after it sealed a deal to supply nickel to Toyota and Panasonic.
This deal comes after, the mining giant had already inked an agreement with Tesla to supply battery-grade nickel.
The nickel sulphate will be supplied from BHP’s Kwinana facility which is expected to produce 100,000 tonnes per year – enough to make 700,000 batteries for electric vehicles.
Big losers in mining could be those involved with coal.
It is expected coal exports will be cut in half by mid-century if climate goals are met.
Coal is Australia’s second most valuable export, and the commodity has enjoyed a surge in price as a COVID-19 rebound and supply crunch push it to record highs.
New research prepared by global resources consultancy Wood Mackenzie, states paints a dire picture for the industry.
The future of coal will depend on how quickly the rest of the world wants to cut emissions.
The Paris Agreement’s ultimate aim is to cut global temperatures to a 1.5 degree rise to avoid catastrophic climate damage.
“In that scenario, the outlook for Australian coal does darken – not completely, but through this decade we would see Australian total coal exports fall about 10%,” Wood Mackenzie principal coal analyst Viktor Tanevski said.
“Longer-term, we could see the trade halve by 2050.”
Australian indices
- ASX 200 gained 0.87% to 7,320.10.
- ASX24 futures rose 0.5% to 7,261.
- S&P/ASX Small Ordinaries is up 0.68% to 3,454.90.
- All Ordinaries is up 0.77% to 7,609.00.
US markets
Wall St was buoyed yesterday by a resolution to the debt crisis.
According to Joseph Palmer & Sons director Alex Moffatt, “Stock indices around the globe all closed higher yesterday as buyers waded back into the market looking for bargains.
“The debt ceiling deal done in the US cheered investors there.
“The deal on the debt ceiling in the US is a just a band-aid and simply extends the limit through to early December. One hopes that by then the politicians love of brinkmanship will turn to seasonal goodwill.”
US Senate Majority Leader Chuck Schumer said lawmakers reached a deal on a short-term debt ceiling increase, avoiding a US government default.
The stocks to benefit included, tech heavyweights Twitter up 4.4%, Apple up 0.9% and Amazon up 1.2%. Costco (NASDAQ:NA:COST) gained 0.8% after reporting better-than-expected September sales. Levi Strauss shares soared 8.5% after the jeans maker beat third-quarter profit estimates. Copper producer Freeport-McMoRan surged 8.2%.
US indices
- Dow Jones gained 1.0% to 34,754.94.
- S&P 500 rose 0.8% to 4,399.76.
- Nasdaq rose 1.1% to 14,654.02.
European markets
Markets were up again in Europe yesterday.
The German Dax index, which is automakers-heavy, posted its best session since May, up 1.9%, shrugging off data that showed a 4% decline in industrial production in August.
London-listed shares in Rio Tinto jumped by 3.5% and BHP shares were 3.6% higher.
European indices
- STOXX 600 rose 1.60% to 458.57.
- German Dax rose 1.9% to 15,250.86.
- UK FTSE rose 1.2% to 7,078.04.