Australia-China relations sour, US markets soar, ASX futures up 15 points

The S&P/ASX 200 index (XJO) slumped 0.7% or 45 points on Wednesday to close at 6116 points as a poor round of profit results took its toll on a number of sectors.

The four big banks were caught in the sell-offs and Telstra was also hard hit, placing a drag on the broader communications index.

The large miners also came under pressure as their share prices were sold down in response to a retracement in the iron ore price.

Futures markets point to a turnaround today, largely reflecting strength in overseas markets as both the NASDAQ and the S&P 500 continued to set record highs.

Leading the way was Netflix with a gain of more than 10%, but there were also strong performances from the likes of Microsoft Corporation and Tesla.

The ASX SPI200 is up 15 points to 6095 points, perhaps a little suppressed due to increased Australia-China political ructions stemming from a review announced yesterday by the Morrison government.

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There was little movement in markets in Japan and Hong Kong with the Nikkei 225 closing down six points at 23,290 points and the Hang Seng gaining six points to close at 25,491 points.

However, the Shanghai Composite fell sharply, closing down 1.3% at 3330 points.

There were across-the-board gains in European markets with the DAX leading the way as it gained 128 points or 1% to close at 13,190 points and the CAC 40 adding 40 points or 0.8%, closing at 5048 points.

There was only a nominal movement in the FTSE 100 as it gained less than 10 points to close at 6045 points.

Most of the action was in the US where the S&P 500 gained 1% to close at yet another record high of 3478 points.

The NASDAQ soared 1.7% or nearly 200 points to close at 11,665 points, up an incredible 70% from the coronavirus low that was struck in late March.

The Dow gained 0.3% or 83 points, closing at 28,332 points.

On the commodities front, gold was back in favour as it rallied 2% or US$40 per ounce to push above US$1962 per ounce.

The Brent Crude Oil Continuous Contract built on gains made earlier in the week, and it is currently hovering in the vicinity of US$46.30 per barrel, up from less than US$44 per barrel on Friday.

The big miners could recover some of yesterday’s lost ground with the iron ore price rebounding 1% to US$124.20 per tonne.

There was also strength in base metals with copper stringing together its third consecutive day of gains to hit the psychological US$3.00 per pound mark.

Nickel was the other strong performer as the metal continued its outstanding run which now reflects nine consecutive days of gains, looking increasingly likely to claim US$7.00 per pound.

Zinc and lead trailed off slightly, but the former has a particularly strong six-month chart which shows a gain of 35% since March.

The Australian dollar continued to strengthen, and it is currently fetching just over US$0.72.