Wall St mixed ahead of US Fed Reserve meeting: ASX to edge higher

Market Reports

by Melissa Darmawan

The Australian share market is poised to edge higher following a mixed finish on Wall St. The S&P 500 lifted 0.2 per cent while the tech heavy Nasdaq closed at a record high since February, up 0.9 per cent but the blue-chip Dow Jones didn’t keep up with its peers shedding 0.2 per cent weighed down by the consumer staples sector. Shares in this sector weighed on the market on the back of rising commodity prices. The higher the commodity price, the more it costs to produce. For example, plastic is a by-product of oil manufacturing. The higher the oil price, the higher the price of plastic which then needs to be passed onto consumers. Last Friday, oil prices rose over 1 per cent after the release of strong economic data in the US and in Europe. Moreover, the nervousness around inflation continues as companies in the US signal inflationary pressures due to higher costs. As the economy continues to reopen, cost pressures from rising raw material and transport prices will be in the forefront in consumer discretionary, industrials and material companies. Despite this, investors have continued to digest the strong quarterly results while assessing the global coronavirus cases which could hinder global recovery. Across the Atlantic, investors continue to brace themselves for another busy week in earnings reporting season. In Asia, market participants keep an eye on the coronavirus situation in India, meanwhile oil prices fell ahead of the OPEC meeting on Thursday. Back home, the Perth and Peel lockdown ends.

Figures from around the globe

Wall Street closed mixed yesterday, the Dow Jones Industrial Average lost 0.2 per cent to 33,982, the S&P 500 added 0.2 per cent to 4,188 and the NASDAQ closed 0.9 per cent higher at 14,139.

European markets closed higher, London’s FTSE added 0.4 per cent, Paris gained 0.3 per cent and Frankfurt closed 0.1 per cent higher.

Asian markets closed mixed, Tokyo’s Nikkei gained 0.4 per cent, Hong Kong’s Hang Seng lost 0.4 per cent and China’s Shanghai Composite closed almost 1 per cent lower.

Taking all of this into equation, the SPI futures are pointing to a 0.1 per cent gain.

Yesterday, the Australian share market closed 0.2 per cent lower at 7,046.

Local economic news

Today the weekly consumer sentiment from ANZ-Roy Morgan is to be published.

Company news 

Trading and market data platform, IRESS (ASX:IRE) has upgraded its net profit after tax guidance for FY2021 to $70-77 million from $56-$63 million. This follows the company finalizing its acquisition payment to the vendors of QuantHouse eight months ahead of schedule. IRESS acquired QuantHouse in 2019 and is a company that focuses its operations in Europe, North America and Asia providing more than 145 data feeds from exchanges and other data providers. Shares in Iress (ASX:IRE) closed 0.7 per cent lower at $9.93 yesterday.

Broker moves

Macquarie rates Origin Energy (ASX:ORG) as an outperform from a neutral with a target price of $4.70. The upgrade in rating follows the broker's suggestion for the company to address their leverage ratio to maintain an investment grade credit rating despite the company’s second earnings downgrade, which has meant that the S&P has placed a negative watch over its BBB rating. The company’s earnings has declined with leverage levels stretched and the broker believes this has been entrenched in the share price and raised its target price. Shares in Origin Energy (ASX:ORG) closed 1.21 per cent higher at $4.18 yesterday.

IPOs

Today car dealership company Peter Warren Automotive (ASX:PWR) Holdings One is set to ring the bell at midday today after a $260 million raising with shares offered at $2.90.

Currencies

One Australian Dollar at 7:55 AM was buying 77.99 US cents, 56.15 Pence Sterling, 84.35 Yen and 64.56 Euro cent.

Commodities

Iron Ore has gained 3.9 per cent to US$193.58
Iron Ore futures are pointing to 0.7 per cent gain.
Gold has added $2.30 to US$1780 an ounce.
Silver had gained $0.13 to US$26.25 an ounce.
Oil was down $0.23 to US$61.91 a barrel.

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