The ASX should open higher this morning after a big gain on Wall Street, but any rise will be far less than the 3% plus gain for the Dow and S&P 500.
Overnight futures trading at the ASX 24 market showing a gain of around 37 points just before 7 am. Coming after Wednesday’s weak session that saw the ASX 200 close down 0.9%, today’s session is shaping up as anything but rousing.
Oil prices rose though ahead of the key online meeting of OPEC and its mates tonight (midnight, our time). If there is a deal we will learn ahead of that meeting’s start just what the Saudis and Russia have agreed, if they have agreed, that is.
Agreement though has been helped by the US Energy Information Administration surprising with the news that US production fell 600,000 barrels a day last week – one of the largest weekly fall ever. That saw US daily output dip to 12.4 million barrels a day from 13 million and tells us the long US fracking boom is over.
Wall Street actually pushed through and into a bull market on Wednesday (a gain of 20% or more from its most recent low – in this case, March 23 for the S&P 500).
The Dow closed up 780 points, or 3.4%—at its highest levels of Wednesday’s session. The S&P 500 also rose 3.4% to surpass a 20% gain from its recent lows, signifying the start of a new bull market. And the Nasdaq Composite gained 2.6%.
The Dow rose 7.7% on Monday, and the S&P rose 7%. Both indexes opened Tuesday about 3% higher but fell over the course of the day to close in the red.
Locally, weak sentiment surrounding the big banks outweighed optimism among real estate stocks on Wednesday, leading to that 0.9% decline on the S&P/ASX 200.
The banks were downgraded by the Fitch ratings agency, which put pressure on share prices and led to sharp falls. Westpac shares fell the most of the big four banks, down 5.4%, to $15.25. Commonwealth Bank shares dropped 3.3% to $59.81, ANZ and NAB both fell about 4.9% to $15.52 and $15.35 respectively.
The ASX 200 Index closed at 5206 points. It is now 14.5% higher than the low-point reached on March 23 after a sharp one-month fall.
