Oil surges 4%, tech stocks under pressure, futures down 13 points
Published 17-SEP-2020 09:35 A.M.
2 minute read
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The S&P/ASX 200 index (XJO) surged more than 1% or 61 points yesterday to close at 5956 points.
However, some of those gains could be erased today with mixed overnight leads from Europe and the US, as well as a sharp decline in the NASDAQ likely to dent confidence.
Yesterday’s gains were largely driven by the tech sector with strong performances from buy now pay later groups, as well as recruitment company Seek and e-commerce retailer Kogan.
The ASX SPI200 index is down 13 points to 5938 points, suggesting investors are factoring in a softer day for tech stocks.
However, partly offsetting such a decline could be support for the energy sector as oil prices soared overnight on the back of an unexpected drawdown in US crude inventories, as well as news that US offshore production would be constrained due to the shutting down of offshore wells that lie in the path of Hurricane Sally.
On the macro front, the release of employment data could also impact the market even though negative news is fully expected.
The Dow gave up about 300 points in the last two hours of trading to finish up 36 points at 28,032 points.
The S&P 500 finished in the red, shedding nearly 0.5% to close at 3385 points.
But the NASDAQ was the big loser, giving up some of its recent gains to close 140 points lower at 11,050 points.
There was a sense of uncertainty in European markets with the FTSE 100 up early in the session before declining by about 50 points.
However, a kick in the last hour saw it finish down only 27 points at 6078 points.
While mainland European markets were up, it was with little conviction as the CAC 40 gained six points to close at 5074 points and the DAX finished up 0.3% at 13,255 points.
As previously mentioned, it was oil that stole the headlines on the commodities front with the Brent Crude Oil Continuous Contract surging 4% to close at US$42.22 per barrel.
Gold traded strongly early in the session, increasing by about US$20 per ounce to US$1980 per ounce, but it is currently hovering in the vicinity of US$1970 per ounce.
Iron ore was the main casualty, falling more than 3% to US$124 per tonne.
Among the base metals there was little movement in copper and nickel, while zinc was in favour as it rallied strongly for the fourth consecutive day, hitting US$1.14 per pound.
Lead was out of favour falling below the US$0.85 per pound mark, taking it back to early August levels.
The Australian dollar continued to fluctuate in a tight range around US$0.73.
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