ASX 200: What is weighing on Australian shares today?

Summary

  • The Australian stock market opened flat on Friday despite the three major Wall Street stock indices closing higher overnight.
  • However, the shares soon dipped and by 10:30 AM (AEST), the ASX 200 was trading at 7,277.10, down 0.35%.
  • The benchmark index had closed 0.4% higher at 7,302.5 on Thursday.

The Australian stock market opened marginally higher on Friday, with the benchmark ASX 200 up just 3.30 points at 7,305.80, despite the three major Wall Street stock indices closing higher overnight. However, the shares soon dipped and by 10:30 AM (AEST), the ASX 200 was trading at 7,277.10, down 0.35%. Banking stocks were dragging the benchmark down during the early trade.

Notably, the benchmark index closed 0.4% higher at 7,302.5 on Thursday, in what is an all-time-high closing for the ASX 200.

In the overnight trade on Wall Street, the Dow Jones edged higher, the S&P 500 rose 0.5%, and the NASDAQ jumped 0.8%. The S&P 500 set a new closing record despite the annual inflation rate advancing to a higher-than-expected 5% in May.

READ MORE: Why are these ASX resource stocks on investors’ radar?

Source: © Rawpixelimages    | Megapixl.com

What has happened so far?

Over the last five days, the index has remained virtually unchanged, but is currently 0.74% below its 52-week high. 

Banks and other financial companies were leading the losses. The shares of Challenger, Bank of Queensland and AMP were trading down 2.2%, 1.6%, and 1.5%, respectively. ANZ was down 1.1%, Westpac fell 1%, and Commonwealth Bank dipped 0.7%.

Gold miners gained in the early trade with Resolute Mining, Perseus Mining and Silver Lake Resources climbing as high as 3.6%.

Tech shares also racked up gains. Afterpay, Appen, and NextDC were up 4.5%, 3.6% and 1.9%, respectively.

The broader All Ordinaries index was down 0.286%, while the ASX 200 VIX Index was down 9.598%.

Source: ASX website; as of 10:30 AM (AEST)

Bonds and dollar

The 10-year Australian bond yields were currently trading 1.11% lower, at 1.425. The 10-year US Treasury note's yield fell to a new three-month low of 1.440% overnight.

The Australian dollar was trading 0.06% higher, at 0.7752. The dollar index fell 0.11% to 90.041 on Thursday.

READ MORE: Which are the top 10 ASX-listed dividend stocks by dividend yield?

Source: © Bulus   | Megapixl.com

What is happening in the commodity space?

Crude oil prices hit a two-year high overnight amid a rise in demand expectations.  Brent futures settled 30 cents higher at US$72.52 a barrel, while US West Texas Intermediate (WTI) crude rose 33 cents to settle at US$70.29 a barrel.

The crude oil WTI futures are currently trading 0.27% lower, at US$70.10.

The rise in inflation in the US triggered an increase in the prices of gold, which is traditionally considered a hedge during price rise. Gold futures settled at 1,896.40 an ounce on Thursday and are currently trading 0.24% higher, at US$1,901.10.

Metals’ update

Copper prices fell on Thursday, pressured by signs of sluggish demand for the red metal from top metals consumer China and its efforts to curb the surging prices for base metals. The benchmark three-month copper futures contract on the London Metal Exchange (LME) eased 0.9% to US$9,889 a tonne by 1555 GMT, close to its lowest since late April 2021.

Copper futures are currently trading 0.14% higher, at US$4.4835.

Iron ore prices too surged on Thursday as benchmark steel futures in Shanghai increased for second session in a row. The most-traded iron ore for September delivery on China's Dalian Commodity Exchange ended daytime trading 0.7% higher at 1,178 yuan (US$184.53) a tonne.

Newsmakers

SkyCity Entertainment Group (ASX:SKC) provided its earnings guidance for FY21. It expects EBITDA in the range of AU$247 million to AU$253 million, and NPAT between AU$84 million and AU$88 million.

Premier Investments Ltd (ASX:PMV) retail segment has increased its FY21 earnings forecast and expects EBIT between AU$340 million and AU$360 million, a rise of 82% to 92% on the underlying FY20 EBIT of AU$187.2 million.

iSelect Ltd (ASX:ISU) announced that it has signed a health insurance policy distribution agreement with Bupa.

Domino's Pizza Enterprises (ASX:DMP) said that it has entered into a binding agreement to acquire 100% of Domino's Taiwan for roughly AU$79 million.

AMP (ASX:AMP) has appointed former State Street Global Advisors MD, Shawn Johnson, as the CEO of AMP Capital. 

READ MORE: How much should you invest to make AU$3,000 a month?


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