Oil crashes to an 18-year low: ASX poised to open higher

Market Reports

by Rachael Jones

We saw a surge on the markets yesterday closing 7 per cent higher – this movement is expected to continue with the ASX expected to open higher this morning. European governments moved to tighten restrictions to contain the coronavirus outbreak with an unrelenting rise in infections and deaths. European leaders are preparing people for a prolonged period of severe disruptions and minimal social contact. The Aluminium price fell to a 4-year low as fears grow of a prolonged recession pushed by the outbreak. The gold price remained volatile and Brent fell to an 18 year low. In Canada you can now get a barrel of oil for less than a pint of beer. The Australian dollar was steady at 61.7 US cents.

Local economic news 

The Reserve Bank is set to release the private sector credit data.

Markets

Wall Street closed higher yesterday: The Dow Jones Industrial Average gained 3.2 per cent to close 22,327, the S&P 500 gained 3.4 per cent to 2627 and the NASDAQ added 3.6 per cent to 7774

European markets closed higher: London’s FTSE gained almost 1 per cent, Paris added 0.6 per cent and Frankfurt closed up 1.9 per cent.

Asian markets closed lower: Tokyo’s Nikkei dropped 1.6 per cent, Hong Kong’s Hang Seng was down 1.3 per cent and China’s Shanghai Composite shed 0.9 per cent.

Taking all of this into equation, the SPI futures are pointing to a 1.3 per cent gain.

Yesterday, the Australian share market closed 7 per cent higher at 5181..

Company news 

Air New Zealand (ASX:AIZ) will begin reducing its workforce from this week as the severe economic impact of COVID-19 hits the airline. 95 per cent of our flights have been cut. The only flights remaining are in place to keep supply lines open and transport options for essential services personnel. Before COVID-19 the company had annual revenue of around $5.8 billion. After paying all our bills, that saw us end the last financial year making a profit of $374 million – a drop of more than $5 billion dollars. They expect that even in a year’s time they will be at least 30 per cent smaller than we are today. Shares in Air New Zealand (ASX:AIZ) closed 1.11 per cent lower at $0.89.

Ex-Dividends

AP Eagers Limited (ASX:APE) is paying 11.25 cents fully franked
MCP Income Opportunities Trust (ASX:MOT) is paying 1.34 cents unfranked
MCP Master Income Trust (ASX:MXT) is paying 0.86 cents unfranked
Partners Group Global Income Fund (ASX:PGG) is paying 0.7338 cents unfranked

Currencies

One Australian Dollar at 7:50 AM was buying 61.71 US cents, 49.68 Pence Sterling, 66.58 Yen and 55.88 Euro cents.

Commodities

Iron Ore has fallen 3.9 per cent to $82.98.
Iron Ore futures suggest a 3.7 per cent fall.
Gold has dropped $12.80 to US$1641 an ounce.
Silver has fallen $0.35 to US$14.18 an ounce.
Oil was down $1.23 to US$20.28 a barrel.