ASX 200 to fall; crude oil prices hit 7-year highs

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ASX 200 to fall; crude oil prices hit 7-year highs

 ASX 200 to fall; crude oil prices hit 7-year highs
Image source: Phongphan,Shutterstock

Highlights

  • The Australian share market is expected to fall on Wednesday.
  • According to the latest SPI futures, the ASX 200 is likely to open the day 74 points or 1% lower.
  • On Wall Street, the Dow Jones ended 1.51% down, the S&P 500 was down 1.84%, and the NASDAQ closed 2.60% lower. 

The Australian share market is expected to open in red on Wednesday following a fall at Wall Street, while domestic commodity stocks are likely to face pressure from weak copper and gold prices. According to the latest SPI futures, the ASX 200 is likely to open the day 74 points or 1% lower. On Tuesday, the benchmark index fell 0.1% to 7,408.8 points.

On Wall Street, the Dow Jones ended 1.51% down, the S&P 500 was down 1.84%, and the NASDAQ closed 2.60% lower. The US stocks fell in overnight trade as Goldman Sachs’ quarterly results missed expectations and surging bond yields hit the tech sector. Furthermore, traders braced for the Federal Reserve to be more aggressive in tightening monetary policy to tackle inflation. The Fed is scheduled to have a policy meeting next week.

MSCI's all-country world index fell 1.22% as tech stocks dropped in Asia overnight.

In Europe, Stoxx 50 fell 1%, FTSE dropped 0.6%, CAC dipped 0.9% and DAX ended 1% lower.

Bond yields

  • 2-year yield: US 1.04%, Australia 0.81%
  • 5-year yield: US 1.65%, Australia 1.59%
  • 10-year yield: US 1.87%, Australia 1.94%, Germany -0.02%

The dollar strengthened and hit a one-week high of 95.638. It was last up 0.4% at 95.608.

Oil prices hit 7-year highs 

Oil prices zoomed and hit 7-year highs after an attack in the UAE caused regional tensions.

  • Brent crude futures rose US$1.03 to settle at US$87.51 a barrel.
  • WTI futures settled US$1.61 higher at US$85.43 a barrel.

Gold prices fall

Gold prices fell after traders became jittery ahead of another US Fed meeting scheduled for next week.

  • US gold futures settled 0.2% down at US$1,812.40 an ounce.

Meanwhile, benchmark iron ore futures on the Dalian Commodity Exchange ended 1.1% higher at 715 yuan a tonne, recovering from losses in early session.

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