Global equities steady following sell-off on global growth concerns

Stock Markets

Australian shares are poised to open marginally higher today as global equities steadied overnight following the recent fearful response to the inverted yield curve. The recent fall came amid fears of global economic slowdown and rising concerns over the possibility of a recession. However, it appears as though these fears have now been priced into the market since the sell-off in global equities which initiated on Friday failed to build momentum on Monday.

Wall Street's major indexes closed with marginal changes overnight following the recent pullback after a strong rally over the past three months. The Dow Jones ended in positive territory with the index gaining 14.51 (+0.06%) points, while the S&P 500, and NASDAQ 100 lost 2.35 (-0.08%) and 5.13 (-0.07%) points respectively. There is still good underlying support at the 200-day and 50-day moving averages of the S&P 500, which are converging around the 2750 level.

The benchmark S&P/ASX200 index closed down 69 points (-1.11%) on Monday with the index dropping 60.7 (1.0%) points within the first 15 minutes, which represents the biggest fall for the local bourse since 2 January. The index was dragged lower by the technology and energy shares which were down 4.03% and 3.37% respectively.

ASX 200 futures are currently up 12 points. 

Today's data releases: RBA assistant governor Ellis speaks; NZ trade balance for February, FHFA house prices January, S&P CoreLogic house prices January; US federal manufacturing index March, CB consumer confidence March.

Commodities and Currencies

Oil prices were mixed on Monday as investors weighed concerns of global economic slowdown against the prospect of tighter crude supply and lower US inventories. Brent crude was up overnight at US$67.20 (+0.25%), while WTI crude experienced a slight retrace at US$58.82 (-0.37%).

Iron ore prices are currently down 0.20% at US$85.81 per tonne.

The spot price of gold is currently up 0.52% at US$1320.51.

The AUD is currently marginally down 0.01% at US71.11¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.