ASX and Global Market Overview
ASX futures were 40 points or 0.6% lower as of 6:00am on Wednesday, suggesting losses at the open.
US stocks closed lower on Tuesday, but were well off the session's lows, a day before the Federal Reserve could be poised to announce its last interest rate hike of this cycle.
The Dow Jones Industrial Average shed 1.1%, the S&P 500 index dropped 1.2%, and the Nasdaq Composite Index closed 1.1% lower.
Commodities and Bonds
In commodity markets, Brent crude oil lost 5.1% to US$75.30 a barrel while gold gained 1.8% to US$2,017.55.
Yields on Australian government bonds increased, with the 2 Year moving up to 3.25% and the 10 Year climbing to 3.44%. US Treasury notes moved down, with the 2 Year yield sliding to 3.98% and the 10 Year yield dipping to 3.42%.
Currency Movements
The Australian dollar moved up to 66.64 US cents from its previous close of 66.28. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, decreased to 96.26.
Asia Markets
The Shanghai Stock Exchange was closed Tuesday in observance of Chinese Labor Day.
Hong Kong stocks notched a small gain in their first day of trading this week. Bank earnings and optimism over Labor Day holiday consumption offset softer April manufacturing PMI in China. HSBC gained 4.45% after Q1 profits tripled, while banks China Minsheng and Bank of Communications added 5.2% and 3.4%, respectively, on solid earnings released before the weekend. Among the decliners, Anta Sports shed 2.9%, Great Wall Motor lost 3.7% and Ping An Insurance slipped 1.9%. The benchmark Hang Seng Index closed 0.2% higher at 19933.81.
The Nikkei Stock Average ended 0.1% higher at 29157.95 as gains in electronics stocks helped offset losses in real estate and brokerage shares. Renesas Electronics gained 3.6% and Advantest rose 3.5%, while Sumitomo Realty & Development dropped 2.0% and Nomura Holdings lost 2.0%.
India’s Sensex index closed 0.4% higher at 61354.71. The upcoming US Federal Reserve rate decision continued to be in focus, along with corporate earnings releases. Gainers included Tech Mahindra, which was 2.9% higher; NTPC, which rose 2.6%; and Tata Steel, which closed up 2.2%. Decliners included UltraTech Cement, which slid 1.3%.
Europe Markets
European markets closed lower Tuesday as worries over the upcoming Federal Reserve meeting brewed. The pan-European Stoxx Europe 600 lost 1.2%, the German DAX shed 1.2% and the French CAC 40 dropped 1.5%.
In London, the FTSE 100 closed down 1.2% after a fresh mix of worries hit stocks across the world in the afternoon. Last week, investors revived their risk appetite following improved earnings from tech giants, but a host of further worries about interest rates, more bank crises, the US debt ceiling and pre-Fed nerves have conspired to prompt a reversal in equity markets, IG Group analyst Chris Beauchamp explained in a market comment. "European and US indices are down sharply, as investors' nerves get the better of them," Beauchamp said.
North America Markets
US stocks closed lower on Tuesday, but were well off the session's lows, a day before the Federal Reserve could be poised to announce its last interest rate hike of this cycle.
The Dow Jones Industrial Average shed 1.1%, the S&P 500 index dropped 1.2%, and the Nasdaq Composite Index closed 1.1% lower.
Regional bank stocks were hammered on Tuesday, a day after JPMorgan Chase & Co. won an auction for the assets of the failed First Republic Bank. The SPDR S&P Regional Bank ETF (KRE) closed down 6.4% for the day.
US crude oil prices also fell Tuesday as fears of a US recession re-emerged. Investors awaited the end of a two-day Federal Reserve policy meeting, in which the central bank was expected to raise rates another 25 basis points. The Fed was also expected to consider pausing rates to evaluate the economic impact of its most aggressive pace of rate hikes in decades.
