Stocks slip, oil lifts, ASX futures down 7 points

Published at May 22, 2020, in Market Wrap

Global equities slid on Thursday as volatility remains elevated on concerns about the long-term impact of the coronavirus and new global trade tensions. Oil markets ignored those worries and lifted to 2-1/2 month highs to extend the recent recovery.

European equities fell about 0.8%, while the S&P 500 and Nasdaq on Wall Street declined by a similar number.

MSCI’s gauge of stocks across the globe shed 0.76%, while the pan-European STOXX 600 index lost 0.75%. The Dax fell 1.4% in Frankfurt, while the FTSE dipped 0.9% in London.

The ASX opened higher on Thursday but eased throughout the day to close 0.4% lower. The benchmark index ASX 200 closed at 5,550.4 points. The Small Ordinaries index of mid-caps rose 0.3%.

Renewed trade war

President Donald Trump warned the United States would react “very strongly” against China trying to gain more control over Hong Kong through new national security legislation. Tension between the two countries has heightened in recent weeks, as they exchange accusations on the handling of the coronavirus pandemic.

In economic news, the European PMI - the purchasing manager index surveys - confirmed economic activity has begun to return, though they were far from stellar.

Oil prices lift, gold futures dip

Oil rose on the view that fuel demand should rebound. Brent, the international benchmark, has bounced up $20 a barrel over the past month, significantly outperforming the U.S. benchmark West Text Intermediate (WTI) crude oil

Brent futures settled up 31 cents at $36.06 a barrel.

Gold futures settled 1.7% lower at $1,721.90 an ounce.

Bitcoin prices fell 4% as the cryptocurrency failed to break through $10,000.

Today

ASX futures trade 7 points lower this morning pointing to a flat open at 10am in Sydney.

While ASX futures point to a slightly lower open, selling may be constrained as much of the downwards movement occurred already yesterday alongside international futures markets.

US markets will be closed on Monday local time for the Memorial Day holiday.

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