Futures up 50 points as gold price soars and NASDAQ makes another new high

The S&P/ASX 200 Index fell 92.6 points or 1.5% to close at 5920.3 as COVID concerns heightened.

Banks are no longer the safe havens they used to be and there were falls of around 2% across the Westpac, NAB and ANZ.

In some respects, it was also surprising to see the health sector (XHJ) down 2.8% with index heavyweights CSL (-3.3%) and Cochlear (-3.3%) caught up in the fallout.

While COVID has the impact of generating demand for some health services, it appears that the sector may have run ahead of itself in the rebound.

This sell-off may also be a sign that investors are starting to focus on valuations given that CSL and Cochlear are trading on fiscal 2021 PE multiples of approximately 40 and 70 respectively.

The gold sector was one of the few shining lights, and with the precious metal spiking last night to a high of nearly US$1830 per ounce, it could be more of the same today.

That said, the ASX SPI200 Futures index is up 50 points to 5941 points, suggesting a fairly positive day of trading despite mixed leads from overseas.

Glancing across commodities markets, it might be the miners that do most of the heavy lifting today.

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In the Asia-Pacific region it was once again the Shanghai Composite that was the standout performer, gaining 58 points or 1.7% to close at 3403 points, its highest close in more than two years.

The index has now put on 15% in six trading days, seemingly incredible given the country was rocked by coronavirus and only recently experienced a second wave of sorts in Beijing.

COVID slowed down the country’s industrial sector, elevating coronavirus to its most notable export.

To put the size of the rerating into perspective, if the S&P/ASX 200 experienced the same rally, it would nearly be at pre-coronavirus levels within a week.

Elsewhere in Asia, the Hang Seng was up 0.6% or 153 points, closing at 26,129 points.

The Nikkei 225 slumped 0.8% or 176 points to close at 22,438 points.

It was a sea of red in the UK and Europe as the FTSE 100 fell 0.5% or 33 points to 6156 points.

Mainland Europe was harder hit with the DAX shedding 1% to close at 12,495 points.

The CAC 40 fared worse, giving up 1.2% or 62 points to finish at 4981 points.

Tech stocks led the way in the US with Apple and Microsoft up more than 2% as the Dow rallied 177 points to close at 26,067 points.

The S&P 500 gained 0.8%, closing at 3170 points.

However, the NASDAQ was the standout performer with the index hitting a new high as it surpassed the 10,500 point mark before closing at 10,492 points, a gain of 1.4%.

Incredibly, it is now some 700 points higher than it was before markets were impacted by coronavirus.

On the commodities front, we mentioned gold’s strong performance, but iron ore was also in the limelight, gaining 3.4% to close at US$106.50 per tonne.

The Brent Crude Oil Continuous Contract rallied strongly, and it is now approaching last week’s high of around US$43.50 per barrel.

Copper continued its run, and it has now broken through the US$2.80 per pound mark, just a touch away from making a 12 month high.

Zinc delivered the best one-day gain amongst the base metals, increasing nearly 3% to hit US$0.95 per pound, the highest level it has traded at for more than four months.

Nickel inched up a little higher to hit US$6.04 per pound, a level it hasn’t traded at since mid-January.

The Australian dollar spent most of the day in an upward trend, closing just shy of US$0.70.