Morning Market Wrap: ASX to Open Higher after US Tech Rally

1 Apr 2021
The ASX is expected to open higher on the last trading day before Easter, with the ASX 200 futures currently trading up 0.26% at 6,786 as of 8:00am AEDT.

Overnight US markets closed out March on a high note, after President Biden announced the details of his US$2 trillion infrastructure and recovery plan. The package was largely in line with expectations and will be funded by an increase in corporate tax to 28% and greater restrictions of moving profits offshore. The tech-heavy Nasdaq was the best performer of the three major benchmarks, with the index rising by 1.54% to finish at 13,246.87. This was caused in part by investors rotating back into the high growth shares of Apple, Microsoft and Facebook which all had gains of more than 1.5%. Tesla was one of the Nasdaq’s best performers, rising by just over 5%. The S&P 500 closed out March on a positive note with the benchmark gaining 0.36% overnight. The Energy Sector weighed on the index, with the sector falling by 0.93% with Marathon Oil and Exxon mobile declining by 2.7% and 1.5% respectively. The Dow Jones industrial average fell on Wednesday with the benchmark declining 0.26% to 32,981.55. JPMorgan and Goldman Sachs both fell by 1.34% after their advisory teams lead the IPO of Deliveroo on the London Stock Exchange. The Deliveroo share price initially fell by more than 30% and later recovered to close 26% down. The Dow and S&P 500 both recorded their best months since November posting 6.63% and 4.24% respectively, whereas the Nasdaq managed a gain of only 0.4%.

The ASX 200 finished the month and quarter positively, with the ASX 200 increasing to 6,790.70 up 0.78%. Despite the recent market volatility due to an increased fear of rising interest rates, the Australian benchmark was able to finish the quarter up just over 3%. This can be largely attributed to the traditional value stocks performance. The Big 4 Banks were amongst this quarters best, with Westpac and ANZ both increasing by 25%. Gold miners and Tech stocks were some of the worst performing shares since the start of the year. Resolute mining and Northern Star resources fell by 45% and 25% respectively, in large part due to the declining gold price. High growth tech companies such as Appen, Altium and Afterpay were hit hard by investors re-evaluating the likelihood of an interest rate rise. Appen fell by 35% for the quarter, whereas Altium and Afterpay fell by 22% and 14% respectively.


*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

The US dollar weakened against most of the major currencies overnight with the US dollar index falling by 0.1% to 93.20. The index measures the value of the US dollar against the Euro, Yen, Sterling, Canadian dollar, Krona and Swiss Franc. The Australian dollar strengthened slightly against the USD rising from US$0.7592 and is currently trading at US$0.7595. Oil prices declined overnight after OPEC+ lowered its expected oil demand growth for the remainder of the year by 300,000 barrels per day. This was somewhat offset by Chinese manufacturing data, which expanded at its fastest rate in 3 months. Brent Crude fell by 1% to US$63.50 per barrel. Gold rose on Wednesday with Spot Gold increasing by 1.6% to US$1710 per ounce. This gain wasn’t able to offset Gold’s worst quarter since 2016, with Spot Gold prices falling by 9%.   


This article was written by Alex Single, Investment Accounts Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.



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