ASX expected to reboot after faltering on Wednesday
Strong support for the big banks was largely instrumental in lifting the S&P/ASX 200 index (XJO) from about 5720 points in the first hour of trading to a mid-session high of more than 5830 points.
However, broad-based selling in most sectors throughout the remainder of the day saw the index close at 5775 points, 0.1% below the previous day.
It was mainly data related to construction activity that weighed on our market, with the value of work completed in the three months to March the lowest in nearly 10 years.
Given the index had gained 5% across Monday and Tuesday, a day of consolidation was inevitable, but we could see the market gather pace again on Thursday based on robust overseas performances.
There was positive sentiment across the UK, mainland Europe and the US, and in a real show of confidence the Dow surged 200 points in the last half hour of trading.
As a pointer to what may lie ahead today, the ASX SPI200 index is up 50 points to 5823 points.
Similar to Australia, Asian markets lacked direction yesterday with the Hang Seng shedding 83 points or 0.4% to close at 23,301 points and the Shanghai Composite coming off 10 points to close at 2837 points.
The Nikkei 225 was also in trouble early before finishing the day strongly, up 148 points to 21,419 points, its best close since February.
UK markets shrugged off political instability surrounding Boris Johnson’s leadership, gaining 1.3% or 76 points to close at 6144 points.
The mood was even stronger in mainland Europe with the CAC 40 surging 1.8% or 82 points to 4688 points, an 11 week high.
The DAX continued its strong performance, surging 153 points to 11,657 points, representing a gain of 1.3%.
It was only in mid-March that the DAX hit a low of 8255 points – is a 3400 point recovery too fast, too soon?
Moving across to the US, the Dow broke through the psychological 25,000 point mark in confident fashion to finish the day at 25,548 points, a gain of 2.2%.
The S&P 500 was up 1.5% to 3036 points.
It was the NASDAQ’s turn to take the back seat after doing plenty of the heavy lifting in recent weeks.
The index still rallied 72 points to close at 9412 points, asserting its position as the best performing index in the US in terms of a coronavirus recovery.
The CBOE Volatility Index is range bound between about 27 points and 29 points, varying little from the previous day, perhaps in response to heightening geopolitical tensions between the US and China.
The Brent Oil Continuous Contract fell markedly from an early session high of US$36.71 per barrel to US$34.70 per barrel.
Gold is treading water, but managing to stay just above the US$1700 per ounce mark, a level that has been a virtual speedbump for the last two months with the precious metal often bouncing sharply after retracing to that point.
Iron ore continues to hover in the vicinity of US$95 per tonne.
All base metals were out of favour, and despite a strong rally on the previous day nickel lost all of those gains plus some.
The Australian dollar is fetching US$0.66.
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