ASX 200 is likely to extend its rally today

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Summary

  • ASX 200 looks to extend its gains with a 0.2% or 13 points higher opening.
  • The Dow Jones reached 34,000 mark for the first time ever and closed 0.9% up at 34,063.
  • The US dollar index recovered 0.06% after touching a four-week low.

On Thursday, the Australian market made yet another highest high in the 14 months period as the market comfortably breached a stiff resistance zone of 7,000 mark. Yesterday, the benchmark index closed 0.51 % up at 7058.6. Today, the ASX 200 looks to extend its gains with a 0.2% or 13 points higher opening and close the week on a positive note.

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World stock markets marked a five-day winning streak of fresh highs on Thursday, fueled by upbeat earnings and strong U.S. economic data that depicted a robust recovery ahead.

Major stock indices posted record highs, including MSCI's global benchmark, Europe's broad STOXX 600, the Dow Industrials the S&P 500 as bonds yields softened.

The Dow Jones reached 34,000 mark for the first time ever and closed 0.9% up at 34,063 while S&P 500 was up by 1.11% to a new record high of 4,170.4. NASDAQ also saw a sharp recovery of about 1.3% and inched closer towards its all-time high.   

The 10-year U.S. Treasury yield fell below 1.6% to 1.563%, the biggest single-day decline in the benchmark's yield in almost three months that helped fuel renewed buying of technology stocks.

Read More: US Adds 916,000 Jobs in March; Jobless Rate Down 6%

Unlike recently when investors feared inflation, the plunge in Treasury yields suggests now they expect deflation in the longer term once stimulus is gone and U.S. growth normalises.

The US dollar index recovered 0.06% after touching a four-week low, while the Australian dollar was up by 0.33 % to $0.7750 against the US dollar after posting its biggest one-day percentage gain since Feb. 19 on Wednesday. Its New Zealand peer was up at $0.7147, highest level since March 23.

The Labor Department noted initial claims for state unemployment benefits plunged to a seasonally adjusted 576,000 for the week ended 10 April, the lowest level since mid-March 2020 and 124,000 below economists estimates.

JPMorgan Asset Management said in a note it was cutting down on its overall exposure in the emerging markets once again, driven by a less optimistic outlook on EM Asia.

Bitcoin is trading flat at US$63,379 around its lifetime high.

Read More: High on Coinbase’s IPO news, Bitcoin sets a new record

Gold prices surged higher

Gold prices surged to its highest level in more than a month as Treasury yields plunged. The US gold Futures settled 1.8% higher at US$1,766.80 an ounce.

Image Source: ID 2013267 © Anchesdd | Megapixl.com

The Australian gold stocks such as De Grey Mining Limited (ASX:DEG), Newcrest Mining Limited (ASX:NCM), Silver Lake Resources (ASX:SLR) and Regis Resources Limited (ASX:RRL) could storm higher today.

Crude oil traded higher

Oil prices held near a one-month high amid strong US economic data and higher demand estimates from the International Energy Agency.

Image Source: ID 7997155 © Ayres | Megapixl.com

Brent crude Futures settled up 36 cents at US$66.94 a barrel while WTI crude Futures rose 31 cents to close at US$63.46 a barrel.

Energy players such as Santo Limited (ASX:STO) and Beach Energy Limited (ASX:BPT) could hold their yesterday’s gains.


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