ASX Futures trending lower following volatility in overseas markets

By Trevor Hoey. Published at Jul 10, 2020, in Market Wrap

The S&P/ASX 200 (ASX:XJO) closed at 5956 points on Thursday, up 0.6%.

The miners were the big drivers with investors focused on commodity price increases in gold, base metals and iron ore.

Most of the big banks were back in favour after some heavy losses on Wednesday.

Afterpay also helped fuel the ASX yesterday — the Australian payments technology company resumed its impressive run rising another 11.4% to $73.5 a share after Morgan Stanley tipped the stock to hit $101 per share. Afterpay founders Nick Molnar and Anthony Eisen are cashing in on the booming success of their buy now, pay later company selling stock worth at least $127 million each as part of a $800 million capital raising.

The ASX SPI200 index is down 24 points to 5896 points this morning, suggesting that negative sentiment will stem from poor performances across overseas markets last night.

24 hours

Yesterday, we generally saw markets in the Asia-Pacific region moved in tandem with Australia.

The Nikkei 225 gained 0.4% to close at 22,530 points, while the Hang Seng rallied 81 points, closing at 26,210 points.

The Shanghai Composite outperformed the other indices, surging another 47 points or 1.4% to close at 3450 points, up about 10% in less than a week.

The index hasn’t traded at these levels since early 2018, hard to fathom given the pending economic challenges the country will face as the coronavirus hangover sets in.

The UK market was hard hit with the FTSE 100 plunging 106 points or 1.7% to close at 6050 points. Earlier this month, rating agency S&P cut its economic projections for the UK, warning of a "perfect storm" in 2021 is if there is no post-Brexit EU trade deal.

Most of the damage was done in the last hour of trading, and the negative sentiment seemed to impact the US market with the Dow shedding 361 points or 1.4% to close at 25,706 points.

The S&P 500 showed a little more grit, coming off 18 points to close at 3152 points.

Once again, it was the NASDAQ that bucked the trend, gaining 55 points or 0.5% to close at a new record high of 10,547 points.

On the commodities front, the Brent Crude Oil Continuous Contract slumped from a mid-session high of US$43.50 per barrel to US$42.35 per barrel.

Gold also trailed off late in the day, retracing from about US$1820 per ounce to close at US$1808 per ounce.

The strong run in the iron ore price came to a halt, but it was looking fairly steady at US$106 per tonne.

Copper continued its fourth consecutive day of gains, up about 5% on the week.

The red metal is now trading at early 2019 levels having pushed past the US$2.84 per pound mark.

Zinc and lead also notched up their fourth consecutive day of gains with both metals hovering around four month highs.

Nickel has been more erratic, slipping just below US$6.00 per pound, but aside from the last week it is nearly 6 months since it has traded around these levels.

The Australian dollar has retraced after testing the US$0.70 mark, now trading in the vicinity of US$0.695.

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