Wall Street lifts on subsiding interest rate concerns, ASX to open higher


February 23, 2018 08:27:04

Australian shares are expected to start the day on strong footing, after Wall Street finished with mixed results.

Markets at 8:10am (AEDT):

  • ASX SPI 200 futures +0.6pc, ASX 200 (Thursday’s close) +0.1pc at 5,951
  • AUD: 78.43 US cents, 56.18 British pence, 63.6 Euro cents, 83.64 Japanese yen, $NZ1.07
  • US: Dow Jones +0.7pc at 24,962, S&P 500 +0.1pc at 2,704, Nasdaq -0.1pc at 7,210
  • Europe: FTSE -0.4pc at 7,252, DAX -0.1pc at 12,462, Euro Stoxx 50 +0.1pc at 3,432
  • Commodities: Brent crude +1.3pc at $US66.27/barrel, spot gold +0.5pc at $US1,330.76/ounce, iron ore -0.3pc at $US78.20/tonne

What happened on Wall Street?

The Dow Jones Industrial Average lifted 0.7 per cent, or 165 points. Earlier in the day, it jumped by more than 350 points, before shedding half those gains.

As for the other two main indexes, they followed a similar trajectory — a strong surge in early trade, then mass-selling action.

While the S&P is just 0.1 per cent higher, the tech-heavy Nasdaq slipped 0.1 per cent as it was dragged down by big-name technology stocks.

Netflix and Google shares fell by 1 and 0.35 per cent respectively.

Amazon shares rose by just 0.16 per cent, while Facebook and Apple’s gains were 0.6 and 0.8 per cent respectively.

This is the fourth straight day that the Nasdaq has ended its day with losses.

The best performing S&P sectors were energy (+1.1pc), materials (+0.7pc) and utilities (+0.6pc).

Energy, in particular, got a boost from Brent crude oil prices, which surged by 1.3 per cent to $US66.27 a barrel.

Also, the yields from US 10-year government bonds — or long-term interest rates — have fallen slightly from their four-year high. They are currently at 2.917 per cent.

This helped the Dow and S&P rebound from their previous two-day losing streak, as investors shrugged off the prospects of more interest rate hikes this year.

Yesterday’s minutes from the Federal Reserve’s January meeting showed it was more confident about the need to keep lifting rates, with most believing inflation would perk up.

Currently, the market is expecting US rates to rise three times this year.

Australian market today

The Australian dollar has rebounded by 0.5 per cent to 78.42 US cents.

It has also lifted slightly against the British pound (+0.2pc), euro (+0.1pc), but fallen against the Japanese yen (-0.6pc).

As reporting season continues, Woolworths is the major company posting its half-year results today.









First posted

February 23, 2018 07:34:08

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