At last – a rally on stockmarkets around the world, a weakening for the US dollar, a sharp fall in oil prices into the bargain, and a rise in spot iron ore prices.
All that means a very solid start for local markets – unlike yesterday’s stumbling start and messy trading.
The share price futures contract shows a 44 point for the ASX 200 at the opening this morning.
Iron ore prices rose 2.2% to $US58.90 a tonne, which will help local sentiment this morning after falling for most of last week.
In New York, US stocks ignored the Fed’s meeting starting tonight, our time and rallied strongly all day.
Wall Street’s confidence followed a very strong day’s trading in Europe, but a more mixed day in Asia, although Chinese shares jumped to new five year highs yesterday.
There were few fears of a possible interest rise signal – unlike trading for much of the past 10 days.
Shares rallied despite oil prices dipping to six year lows, on top of last week’s losses of between 8.5% and 9.6%.
In New York, April futures for West Texas type of crude ended trading at $US43.88 a barrel, down 96 cents, or 2.1%, after dropping under $43 in trading. Prices for a most-active contract haven’t settled at a level this low since March 11, 2009. Last week, they fell 9.6%.
In London, April Brent crude futures fell $US1.23, or 2.3%, to end at $US53.44 a barrel on the contract’s expiration day. Prices dropped 8.5% last week.
Oil prices fell despite forecasts from Opec for a fall in US production by the end of the year (which is accepted by most commentators).
The S&P 500 rose 27.79 points, or 1.4%, to 2,081.19. The Dow jumped 228.11 points, or 1.3%, to 17,977.42 and the Nasdaq Composite added 57.75 points, or 1.2%, to 4,929.51.
European stocks saw a new high for German stocks as the flood of money into the market continued as the European Central Bank continued on its massive asset-purchase program.
The ECB in fact said it bought more than 9 billion euros of bonds last week – the first week of its bond buying spree.
The Stoxx Europe 600 climbed 0.9% to 400.18, the first close above the 400 mark since June 2007. But it also closing in on its record high of 405.50 reached in March 2000.
German’s DAX 30 soared 2.2% to 12,167.72, marking the first time the index has traded above 12,000. France’s CAC 40 rose 1% to 5,061.16. On Friday, it notched its first close above 5,000 since May 2008. Elsewhere on Monday, London’s FTSE 100 rose 0.9% to 6,804.08.
The Dax is up well over 20% so far this year in euro terms, but in US dollar terms, the gain is around 6%.
Oil prices fell to six year lows and could go lower in coming days, and Comex gold futures ended higher for a third session in a row, as a weaker US dollar helped lift the metal’s investment appeal, but pressure from the stockmarket gains capped gold’s appeal.
Comex gold for April delivery added 80 cents, or 0.1%, to settle at $US1,153.20 an ounce. Comex May silver was stronger, up 12.3 cents, or 0.8%, to $US15.617 an ounce.
In Australia, the S&P/ASX 200 index fell 17 points, or by 0.3%, to 5,797.7, while the All Ordinaries index dropped 18 points to 5,769.7.
