Next Investors logo grey

Overseas action points to a positive day on the ASX

Published 21-MAY-2020 09:07 A.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

After spending the first half of Wednesday’s session in negative territory, the S&P/ASX 200 index (XJO) found some support in the last two hours of trading, closing up 13 points or 0.2% to 5573 points.

With overseas markets rising in unison overnight and the ASX SPI200 futures up 36 points this morning to 5604 points, it should be smoother sailing today.

Positive sentiment in global markets can largely be attributed to a shift in mindset from addressing coronavirus issues to getting back to business.

There was also good news on the commodities front, and our energy stocks could come under the spotlight today.

24 hours

Asian markets traded in similar fashion to the ASX, struggling early before gaining momentum late in the day.

The NIKKEI 225 was the best performer, gaining 0.8% or 162 points to 20,595 points, its best close since early March.

The Hang Seng was relatively flat, gaining 11 points to close at 24,400 points, while the Shanghai Composite shed 15 points or 0.5% to close at 2883 points.

By the time UK and European markets opened, the mood had changed significantly as the FTSE 100 accelerated throughout the day to finish up 1.1% at 6067 points, its second highest close since early March.

The German DAX continues to outperform its neighbours, and the 148 point gain saw it close up 1.3% at 11,223 points, a 10 week high. The CAC 40 gained 0.9% or 39 points to close at 4497 points.

In the US, the Dow opened strongly and hit a mid-morning high of 24,649 points before closing at 24,576 points, a gain of 1.5% or 369 points.

The S&P 500 gained 1.7% or 48 points to close at 2971 points.

The NASDAQ was the best performing index, surging 190 points or more than 2% to close at 9375 points, a three month high.

Consistent performances across most markets saw the CBOE Volatility Index (VIX) fall more than 8% to 28 points, bringing it back to February levels.

On the commodities front, gold wasn’t dumped as investors became less risk averse, gaining 0.3% to push just above the US$1750 per ounce mark.

Oil was the standout commodity, pushing up from early session lows of around US$34.30 per barrel to a high of US$36.46 per barrel, and it continued to trade around the US$36 per barrel mark throughout the afternoon.

Iron ore experienced its first dip in a number of days, but it was only down marginally at approximately US$96 per tonne.

There were further strong performances across base metals with copper returning to mid-March levels as it hit US$2.43 per pound.

Lead also chalked up a milestone, closing at US$0.75 per pound, a one month high.

After three consecutive days of strong gains, nickel hit US$5.64 per pound, a level it hasn’t traded at since mid-March.

Zinc’s close of US$0.92 per pound is close to a three month high, and it has increased approximately 12% in the last two months.

The Australian dollar continued to strengthen against the US dollar and it is now fetching approximately US$0.66.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.