ASX 200 to rise; US stocks rally; oil prices ease

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ASX 200 to rise; US stocks rally; oil prices ease

ASX 200 to rise; US stocks rally; oil prices ease
Image source: © Outline205 | Megapixl.com

Highlights

  • The Australian share market is poised to open higher on Wednesday.

  • According to the latest SPI futures, the ASX 200 is likely to open 46 points or 0.6% higher.

  • On Wall Street, the Dow Jones rose 1.45%, the S&P 500 climbed 1.61%, and the NASDAQ stormed 2.15%.

The Australian share market is poised to open higher on Wednesday following a strong overnight rally on Wall Street. But a decline in commodity prices may hurt mining stocks and cap gains on the benchmark index.

According to the latest SPI futures, the ASX 200 is likely to open 46 points or 0.6% higher. On Tuesday, the benchmark index rose 0.55% to 7,565.2 points.

Meanwhile, US stocks advanced on Tuesday on the back of stronger than expected corporate earnings, but downbeat forecasts on global economic growth pushed up bond yields and drove down oil. On Wall Street, the Dow Jones rose 1.45%, the S&P 500 climbed 1.61%, and the NASDAQ stormed 2.15%.

In Europe, the Stoxx 50 fell 0.5%, the FTSE dipped 0.2%, the CAC dropped 0.8%, and the DAX ended 0.1% lower. The MSCI world equity index was up 0.81%.

Of the 49 companies in the S&P 500 that have reported quarterly earnings as of Tuesday, nearly 80% have topped profit estimates, according to Refinitiv data.

Bond yields

The US Federal Reserve looks set to raise its interest rate by 50 basis points when it meets next month, and a 75 basis-point hike has not been ruled out as Fed officials scramble to curtail inflation.

  • 2-year yield: US 2.60%, Australia 2.10% (US prices as of 4.32 PM in New York)
  • 5-year yield: US 2.92%, Australia 2.71%
  • 10-year yield: US 2.94%, Australia 3.06%, Germany 0.91%

The dollar index was last up 0.2% to 100.986.

Oil prices inch lower

Oil prices were down about 5% in volatile trading on Tuesday on demand concerns after the International Monetary Fund (IMF) cut its economic growth forecasts and warned of higher inflation.

  • Brent crude fell 5.22% to settle at US$107.25 a barrel.
  • WTI dropped 5.22% to settle at US$102.56 a barrel.

Gold prices fall

Gold fell over 1% on Tuesday as a stronger dollar and rising Treasury yields overshadowed safe-haven inflows into bullion.

  • Spot gold fell 1.1% to US$1,956.66 per ounce by 12:35 PM ET (1635 GMT).
  • US gold futures dipped 1.5%.

Meanwhile, Dalian and Singapore iron ore futures fell on Tuesday, sharply reversing gains made earlier in the session, after a spokesperson for China's state planner said the country would keep reducing steel output this year.

The most-traded September iron ore on China's the Dalian Commodity Exchange ended daytime trade 3.3% lower at 887 yuan (US$139.18) a tonne, after touching a two-week high of 942 yuan earlier in the session.

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