European markets down, whilst US and Asian stock markets rally

By Trevor Hoey. Published at Aug 24, 2020, in Market Wrap

The S&P ASX 200 index (XJO) came off nine points on Friday, leaving it down 15 points or 0.2% for the week.

In a fairly mixed day there were some better than expected profit results, but looking across developments throughout the week the main focus seemed to be on uncertainty from the Federal Reserve regarding the state of the US economy and evidence of deteriorating geopolitical relations between Australia and China.

There were mixed leads from overseas with European markets down and US markets rallying, which could see a fairly uncertain start to the week.

The ASX SPI200 suggest this may be the case, down 11 points to 6057 points

24 hours

Asian markets rallied as one on Friday with the Hang Seng leading the way, soaring 322 points or 1.3% to close at 25,113 points.

The Shanghai Composite increased 0.5% to 3380 points while the Nikkei 225 added 0.2% to finish at 22,920 points.

The mood in Europe was fairly lacklustre with the FTSE 100 closing down 0.2% at 6002 points.

In mainland Europe, the DAX was the hardest hit, falling 0.5% to close at 12,765 points.

The CAC 40 shed 0.3%, finishing the week at 4896 points.

US markets shrugged off weak leads from Europe as the Dow gained 190 points or 0.7% to close at 27,930 points.

Positive data across the country’s manufacturing and construction industries buoyed investor confidence.

The S&P 500 notched up another record close as it finished the week at 3397 points.

Not to be outdone, the NASDAQ also recorded its best close in history at 11,311 points.

On the commodities front, gold continued to hover in the vicinity of US$1950 per ounce.

The Brent Crude Oil Continuous Contract fell sharply from about US$45 per barrel to US$43.60 per barrel before making a slight recovery late in the session to close at US$44.26 per barrel.

After a strong week in which it eclipsed the US$3.00 per pound mark, copper shed some of those gains on Thursday and Friday to close at US$2.96 per pound.

Zinc and lead also fell off towards the end of the week, but they are both well above where they were sitting in March/April.

Nickel finished the week impressively, and after seven consecutive days of gains it has increased approximately 6% from US$6.32 per pound to US$6.68 per pound, levels not seen since 2019.

Iron ore has taken a breather, coming off 1.5% to US$127.40 per tonne.

The Australian dollar fell 1.5% after peaking at a high of US$0.727 on Wednesday to close at US$0.716.

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