ASX 200 braces to open in red as global COVID-19 spike hits US stocks  

Summary

  • The ASX 200 is expected to open lower on Tuesday after US stocks tumbled due to global surge in coronavirus cases, pushing away investors from risky assets.
  • The benchmark index is expected to open 1% lower on Tuesday.
  • On Wall Street, the Dow Jones crashed 2.1%, the S&P 500 dropped 1.6%, and the NASDAQ fell 1.1%. 

The Australian share market is expected to open lower on Tuesday after US stocks tumbled due to global surge in coronavirus cases, pushing away investors from risky assets. In overnight trade, concerns around rising Delta variant infections negatively impacted bond yields and oil prices.

                       

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The benchmark ASX 200 is expected to open 1% lower on Tuesday, according to the latest ASX futures.  On Monday, the ASX 200 closed 0.85% lower at 7,286.

It was the largest one-day percentage fall for the S&P and the NASDAQ Composite since mid-May.  The Dow Jones crashed 2.1%, the S&P 500 dropped 1.6%, and the NASDAQ fell 1.1%. 

Global investors are also concerned about inflation. Meanwhile, on Monday, US President Joe Biden said that prices for some items such as vehicles have increased. However, he also said that his administration would remain vigilant over inflation.

Source: ©Ymgerman    | Megapixl.com

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The US dollar climbed to a more than three-month peak against a basket of major currencies. 

Bond yields

Amid fears over rising coronavirus cases across the world, the US Treasury bond yields fell to five-month lows on Monday.

The yield on benchmark 10-year notes dipped 12.2 basis points to 1.177%, near session's low of 1.176%. It is a level which was last seen in February 2021.

Tech shares to trade lower

The Australian tech shares are expected to trade lower on Tuesday after the tech-heavy NASDAQ Composite closed lower by 1.1%.  Domestic tech shares such as Xero (ASX:XRO), Afterpay (ASX:APT), and BrainChip Holdings (ASX:BRN) could face selling pressure.

READ MORE: Oversupply fears drag Crude oil prices; 3 ASX oil stocks under lens

Crude oil dips

Oil slumped US$5 a barrel on Monday, closing out its worst day since March, after an OPEC+ agreement to boost output triggered fears of a surplus just as rising COVID-19 infections once again threaten demand.

Brent crude settled at US$68.62 a barrel, losing US$4.97, or 6.8%. US oil futures for August delivery settled at US$66.42, down US$5.39, or 7.5%. The September US crude oil futures contract settled at US$66.35, down US$5.21.

Major stocks such as Viva Energy Group (ASX:VEA), Santos (ASX:STO) and Woodside Petroleum (ASX:WPL) could be under pressure today.

Source: ©Flynt   | Megapixl.com

Gold falls

Gold traded on a weak note on Monday amid a tug of war between a strong greenback and a fall in Treasury yields.

US gold futures dropped 0.5% to US$1,806.50. Gold miners such as Silver Lake Resources (ASX:SLR), Northern Star Resources (ASX:NST), and De Grey Mining (ASX:DEG) could be under pressure today.

Metals update

The most-traded steel rebar on the Shanghai Futures Exchange, for October delivery, ended up 0.8% to 5,568 yuan (US$859.42) per tonne.

Benchmark copper on the London Metal Exchange (LME) was down 2.1% at US$9,232 a tonne by 1600 GMT.

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