ASX Futures up 21 points following a strong lead from the US

By Trevor Hoey. Published at Sep 28, 2020, in Market Wrap

The S&P/ASX 200 index (XJO) finished last week on a good note with a gain of 88 points recorded on Friday, pushing the index up to a close of 5965 points.

This was its best close since early September, and it mainly stemmed from strong performances across the healthcare and industrial sectors, as well as a 3% week-on-week gain by index heavyweights in the financial sector.

The financial sector was buoyed by moves to relax the responsible lending laws that have served to constrain all facets of consumer and business lending.

With US markets having performed strongly at the end of the week this positive momentum could continue, and the ASX SPI200 futures index is pointing in that direction, up 21 points to 5951 points.

In the US, it was the NASDAQ once again leading the way with a gain of 241 points or 2.3% taking it to a close of 10,913 points as it threatens to once again breach the psychological 11,000 point mark.

The S&P 500 also performed strongly, gaining 52 points or 1.6% to close at 3298 points, while the Dow finished at 27,174 points, up 1.3%.

The US market wasn’t driven by any significant economic developments, rather it was a flock to oversold stocks.

Conversely, there are likely to be a number of market catalysts this week with discussions being held regarding a fourth package of stimulus initiatives, as well as the first presidential election debate.

The mood wasn’t as positive in Europe with the DAX shedding 137 points or 1.1% to close at 12,469 points.

The CAC 40 also took a hit, coming off 33 points to close at 4730 points.

UK markets were more positive, and despite a mid-session dip the FTSE 100 rallied strongly towards the end of trading to finish at its peak for the day of 5843 points.

Australian gold miners still in good shape

Gold continued to lose ground, and on a week-on-week basis it has fallen from more than US$1950 per ounce to US$1864 per ounce.

Interestingly, the Australian dollar has fallen from US$0.722 to US$0.702 over the same period.

This indicates that the Australian dollar gold price has only fallen by about $50 per ounce, and it is currently sitting just above $2650 per ounce, implying hefty margins for our home-grown miners.

There was little movement in the Brent Crude Oil Continuous Contract on Friday as it finished the week at US$42.41 per barrel.

The spiralling iron ore price finally found some support, finishing the week around the US$115 per tonne mark.

Base metals continued their downward trend as copper notched up its fourth successive day of losses, closing at US$2.98 per pound.

It was a similar weekly trend with lead as multiple losses saw it fall from more than US$0.85 per pound to just over US$0.82 per pound.

Zinc also declined significantly to close at US$1.07 per pound, taking it back to mid-August levels.

Having already conceded five consecutive days of losses leading into Friday, nickel finally found a base, closing slightly higher at US$6.48 per pound, well shy of the relatively long-term high of US$7.14 per pound struck on September 2.

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