ASX futures down 35 points amid renewed health and economic fears

By Trevor Hoey. Published at Jul 6, 2020, in Market Wrap

The S&P/ASX 200 (XJO) gained 25 points on Friday to close at 6057 points, topping off a good week with an overall gain of 2.6%.

Friday’s gain, however, was the most moderate of the week, suggesting that Monday is not likely to run on the back of last week’s momentum but more likely be driven by international or domestic developments.

The coronavirus resurgence could well be front and centre today, and there could be some second guessing as to what may stem from tomorrow’s RBA policy meeting.

Looking at possible global drivers, US markets didn’t trade on Friday due to Independence Day, suggesting that our markets will mainly be influenced by the manner in which UK and European markets ended last week.

That being the case, we could be in for a poor start to the week, and the ASX SPI200 index is certainly pointing in that direction, down 35 points to 5999 points this morning.

The only factor that could work in our favour was a relatively robust finish to the week in terms of the gold price and a significant lift in the oil price on a week on week basis.

As a measure of the former, the S&P/ASX All Ordinaries gold index finished the week at 8567 points, less than 2% shy of its 12 month high of 8730 points.

24 hours

Working across the time zones on, the Shanghai Composite was the star performer gaining 2% to close at 3152 points.

The Hang Seng was also relatively strong, gaining 1% or 249 points to close at 25,373 points.

The Nikkei’s close of 22,306 points represented a gain of 0.7%.

It wasn’t long after the open that the FTSE 100 slipped into negative territory, and it was all downhill from there as it shed 1.3% or 83 points to close at 6157 points. Negative commentary regarding a lack of anticipated large tax cuts undermined investor sentiment, and it was mainly the banks that were sold down heavily.

The mood was similar in mainland Europe with the DAX shedding 0.6% or 80 points to close at 12,528 points.

The CAC 40 was hit harder as it came off 0.8% to close at 5007.

It was a stellar week for gold having surpassed the US$1800 per ounce mark, and while there was a retracement to around the US$1770 per ounce mark towards the latter part of the week, it stabilised on Friday finishing at US$1787 per ounce.

The oil price kicked off the week around the US$40 per barrel mark and gradually increased throughout the week to pass US$43 per barrel, before finishing just shy of that mark.

There was little movement in base metals prices.

Iron ore was up 1.2%, taking it just above the US$100 per tonne mark.

The Australian dollar gained ground against the US dollar for most of the week, increasing from about US$0.685 to finish near its week high of US$0.695.

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