Records continue to tumble in US, DAX surges 2%, ASX futures up 42 points

By Trevor Hoey. Published at Sep 3, 2020, in Market Wrap

The S&P/ASX 200 index (XJO) soared 110 points on Wednesday to close at 6063 points, helping to offset three consecutive days of losses leading up to that point.

Given the strength in overseas markets last night, this trend is likely to continue and the ASX SPI200 index is up 42 points to 6093 points.

Better than expected manufacturing figures and a hint that stimulus packages could be on the horizon in Europe drove overseas markets higher.

The US Fed Reserve’s Beige Book report had been eagerly awaited, but it mainly confirmed what investors had already factored in.

24 hours

Markets were mixed in the Asia-Pacific region with Japan being the standout performer as the Nikkei 225 gained 110 points or 0.5% to close at 23,247 points.

Key indices in China and Hong Kong were both down around 0.2% with the Hang Seng declining 64 points to 25,120 points and the Shanghai Composite falling six points to 3405 points.

As European markets opened, the big moves started with Germany leading the way as the DAX rallied 270 points or 2% to close at 13,243 points, its best close since the coronavirus downturn commenced in February.

It is also worth noting that the index is now only 4% shy of its all-time high of 13,795 points.

France wasn’t far behind with the CAC 40 up 1.9% to 5031 points.

The FTSE 100 also put in a robust performance, gaining 79 points or 1.3% to close at 5940 points.

The US continues to set new records with the S&P 500 gaining 54 points or 1.5% as it notched up a record close of 3580 points.

The NASDAQ followed suit as it breezed past the 12,000 point mark to close at 12,056 points, a stunning achievement given it has taken less than three months for the index to increase 20% from 10,000 points.

On the commodities front, gold trailed off as confidence grew and it is now hovering in the vicinity of US$1950 per ounce, representing a fairly flat performance on a week-on-week basis.

The Brent Crude Oil Continuous Contract tanked, falling from about US$46 per barrel to US$44.20 per barrel, suggesting it could be a tough day for our energy stocks.

Conversely, iron ore rallied strongly as it gained more than 2% to US$127.30 per tonne, no doubt buoyed by better than expected manufacturing activity.

However, the same thematic didn’t provide much support for base metals, but it could be argued that they were due for a breather after running strongly in recent weeks.

Nickel was the exception as it continued to power ahead, gaining more than 1% to hit US$7.14 per pound.

In the last 14 trading sessions, nickel has gained ground on 13 of those occasions as it increased 13% in three weeks from US$6.32 per pound.

The Australian dollar eased slightly overnight, and it is currently fetching just shy of US$0.75.

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