ASX 200 slides despite rallies on Wall St, oil prices hit seven-year highs amid Russian-Ukrainian tensions

Australian shares closed lower as investors eagerly awaited the Reserve Bank of Australia’s monetary policy meeting on Tuesday.

The ASX 200 fell 0.2% to 6,972 points.

It was dragged lower by mining and financial heavyweights, although strong performance by tech stocks helped limit losses.

The benchmark index closed 2.2% higher on Friday after a four-day losing streak.

Despite the overall decline, seven of the 11 sectors ended higher today.

Information Technology was the best performing sector, gaining 3.7% and rebounding from its recent decline.

Ansell led the losses, down 14.3% to $26.76, after lowering its full-year forecast.

Nib Holdings (-6pc), PointsBet (-4.1pc) and Blackmores (-4pc) were also among the worst performers.

However, Block gained 8.1% to $161.41, while ARB Corp and Zip were up 7.9% and 7.5% respectively.

The Australian dollar was up, at 70.15 US cents, at 4:26 p.m. AEDT.

Rally of global stocks

All three major US stock indexes closed higher on Friday.

The Dow Jones Industrial Average rose 1.65% and the S&P 500 2.43%. The Nasdaq Composite added 3.13%.

However, the pan-European STOXX 600 index closed down 0.99% on the day for a fourth week of losses, weighed down by concerns over tensions between Russia and Ukraine.

Economic data helped ease inflation fears, with US data showing consumer spending and labor cost increases were weaker than expected in December.

“The widely watched employment cost index was a little weaker than expected, suggesting wages could start to cool from here,” said Stephanie Roth, senior economist at JP Morgan Private. Bank.

Mounting inflationary pressures could force the Fed to raise interest rates quickly, stifling growth, economists have warned.

MSCI’s leading 50-country global index rose 1.49% but remained on the brink of its worst January since the 2008 global financial crisis after losing around $7 trillion ($9.98 million). dollars) in value.

oil pressure

Meanwhile, oil prices hit seven-year highs following the release of inflation data and, as geopolitical tensions continued to raise concerns, the Ukraine crisis could disrupt energy markets.

US President Joe Biden and his EU counterpart Ursula von der Leyen pledged to cooperate to ensure energy security for Europe and Ukraine amid stalemate triggered by Russian troop deployment at the Ukrainian border.

The price of Brent crude oil added 69 US cents, or 0.8%, to US$90.03 a barrel.

The price of US Nymex crude added 21 US cents, or 0.2%, to US$86.82 a barrel.

Investors are cautiously starting to buy U.S. crude when prices fall due to supply disruption concerns due to rising geopolitical tensions, said Tatsufumi Okoshi, senior economist at Nomura Securities.

“The market expects supply to remain tight as OPEC+ is expected to maintain the current policy of gradually increasing production,” he said.

Meanwhile, the market is focused on a Feb. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, a group known as OPEC+.

It is likely to stick to a planned increase in its oil production target for March, several sources at the group told Reuters.

Meanwhile, iron ore prices jumped on Friday to their highest level since August 2021.

ABC/Reuters


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Felix J. Dixon