ASX 200 to rise as Omicron concerns ease

Highlights

  • The Australian share market is expected to rise on Wednesday.
  • According to the latest SPI futures, the ASX 200 is likely to open 53 points or 0.7% higher.
  • On Wall Street, the Dow Jones rose 1.40%, the S&P 500 gained 2.07% and the NASDAQ advanced 3.03%.

The Australian share market is expected to rise on Wednesday amid easing of concerns induced by Omicron COVID-19 variant, with sharp rises in the price of iron ore and oil expected to boost commodity stocks.

According to the latest SPI futures, the ASX 200 is likely to open 53 points or 0.7% higher. The benchmark rose 0.95% on Tuesday.  The Reserve Bank of Australia (RBA) on Tuesday left interest rates unchanged at 0.1%.

Meanwhile, global and US stocks rose overnight after Chinese stimulus triggered a rally that was further fueled by views that the Omicron COVID-19 variant would not cause major economic damage.

MSCI's all-country world index advanced 2.17% and the FTSEurofirst 300 closed up 2.42%.

On Wall Street, the Dow Jones rose 1.40%, the S&P 500 gained 2.07% and the NASDAQ advanced 3.03%.

Bond yields

  • 2-year yield: US 0.69%, Australia 0.66% (at 3:14 PM in New York)
  • 5-year yield: US 1.25%, Australia 1.34%
  • 10-year yield: US 1.48%, Australia 1.64%, Germany -0.38%

Expectations the Federal Reserve would accelerate the tapering of its bond-buying program when it meets next week in response to a tightening labor market supported the dollar.

The dollar index rose 0.1% to 96.387. The euro fell 0.3% to US$1.1257, and the yen rose 0.1% to US$113.57.

Oil prices rise

Oil prices climbed more than 3% on easing Omicron concerns and delays to Iranian crude’s return to the market.

  • Brent crude rose US$2.36 to settle at US$75.44 a barrel.
  • WTI settled up US$2.56 to US$72.05 a barrel.

Gold prices edge higher

Gold prices inched higher as attention turned to US inflation data due on Friday, which could influence the pace at which the Fed hikes interest rates. Easing of Omicron-induced concerns also helped.

  • US gold futures settled up 0.3% at US$1,784.70 an ounce.

Meanwhile, the most-traded May iron ore on China's Dalian Commodity Exchange ended daytime trading 6.7% higher at 659.50 yuan (US$103.56) a tonne.

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