Futures up 48 points as tech stocks surge and metals remain robust

After a slow start to the day the S&P/ASX 200 index (XJO) surged in the afternoon to finish 30 points higher at 6132 points.

With overseas markets generally performing strongly overnight it would appear that this positive momentum is likely to continue, and not surprisingly the ASX SPI200 index is up 48 points to 6161 points.

Strength in commodities should also provide support with both precious and base metals looking robust.

Looking across the indices, it was the NASDAQ that once again stood tall, gaining nearly 300 points to close at 11,876 points, representing an increase of 2.6%.

The index traded as high as 11,965 points last night, less than 100 points shy of the record closing high that it made at the start of September.

The S&P 500 also surged 57 points or 1.6% to close at 3534 points, just 46 points shy of its record September close of 3580 points.

The Dow gained 250 points or 0.9% to close at 28,837 points.

Tech stocks accounted for most of the gains with Apple Inc, (+6.3%), Microsoft Corp (+2.6%) and Intel Corp. (+2%) leading the way.

There were also strong performances in the financial sector with Goldman Sachs and JP Morgan Chase up 3.2% and 1.2% respectively.

It was a similar story in Europe with the DAX and the CAC 40 both up nearly 0.7%, although the FTSE 100 disappointed slightly as it dropped 15 points to close at 6001 points.

Oil down, base metals up

On the commodities front, gold pulled back slightly towards the end of trading, but it remains just shy of the US$1930 per ounce mark.

Oil was one of the few commodities to disappoint, taking a dive during the afternoon to drift below US$42 per barrel, a significant fall after closing last week around the US$43 per barrel mark.

The decline appeared to be in response to Iraq’s oil minister Ihsan Abdul Jabbar saying that he expects pressure on oil prices to continue until at least the first quarter of 2021.

He cited increased output from Libya, as well as an uptick in production from US shale producers as negatively impacting the supply/demand curve.

Regards the latter, oilprice.com reported today that active well completion crews in the US had increased from 101 in the last week of September to 115 last week.

This news hasn’t been lost on the services sector with shares in Caterpillar Inc (NYSE:CAT) surging from US$146.70 at the start of October to hit a new 12 month high of US$163.20 last night.

Australian investors looking to cash in on an uptick in energy services activity could consider Worley Group (ASX: WOR).

On the base metals front, copper continued its positive momentum, increasing to US$3.05 per pound.

After finishing the week with strong gains on Thursday and Friday, the nickel price edged up slightly.

It was a similar story with lead - out of the last five days it has registered four gains, now sitting above US$0.82 per pound, up more than 4% on a week-on-week basis.

Zinc has continued its strong run, and it has now reclaimed more than half of the lost ground that occurred when it slumped from about US$1.13 per pound in mid-September to hit a low of US$1.05 per pound.

Last night’s gain was its fourth consecutive increase as it pushed above US$1.10 per pound.

The Australian dollar weakened overnight and it is now hovering just above US$0.72.