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ASX Today: ASX caps off worst week since GFC with more losses

Stocks look set to trim yesterday's bumper gains at today's open despite a late rally on Wall Street following reports of progress on stimulus talks.

ASX SPI200 index futures slipped 14 points or 0.2 per cent, denting hopes of quick gains after yesterday's 1.9 per cent bounce on the S&P/ASX 200.  

A jittery overnight session saw US stocks swing from losses to gains several times before a decisive move higher in the final hour. The late rally came as Congressional leaders moved to closer to ending an impasse over a new relief package to replace measures that expired on Friday.  

The S&P 500 finished 12 points or 0.36 per cent ahead. The Nasdaq Composite kept pace with a rise of 38 points or per 0.37 cent to a fifth straight win and a new record close. The Dow Jones Industrial Average was the best of the three indices with a gain of 164 points or 0.62 per cent.

“US markets have paused this morning while investors consider this week’s developments so far and catch their breath while waiting for a large amount of scheduled news due later in the week,” Colin Cieszynski, chief market strategist at SIA Wealth Management in the US, said in a research note.

Negotiations for a new US$1 trillion coronavirus relief package have become mired over whether Americans should receive additional unemployment assistance. The overnight bounce came after Democrat House Speaker Nancy Pelosi said she had held "productive" talks with her Republican opposite number and the White House's Chief of Staff. She added that she hoped for a bipartisan agreement by the weekend, allowing votes on the legislation next week.

Energy, real estate and consumer staples were the night's best performers, all rising at least 1.3 per cent. The financials and health sectors both fell 0.4 per cent.

The market-leading tech sector traded mixed. Apple, the world's biggest company by market value, climbed 0.6 per cent to a fifth straight gain. Facebook slipped 0.9 per cent and Alphabet 0.6 per cent. Microsoft gave up 1.5 per cent after President Donald Trump said he expected the government to receive a cut of any deal to buy the international operations of China's popular TikTok social media app.

The Arca Gold Bugs index of US miners rose 4.43 per cent as the precious metal closed above US$2,000 for the first time. Gold for December delivery settled $34.70 or 1.7 per cent higher at US$2,021 an ounce.

Trading volumes were slightly below the recent average as investors awaited fresh catalysts. Tonight brings a monthly private payrolls report that serves as a taster for Friday's July government jobs report.  

BHP and Rio Tinto traded mixed despite another upleg for iron ore. BHP's US-listed stock put on 0.88 per cent and its UK-listed stock 0.39 per cent. Rio Tinto eased 0.08 per cent in the US and 0.7 per cent in the UK. The spot price for iron ore landed in China improved $1.65 or 1.4 per cent to US$118 a dry ton.

Oil moved higher ahead of the weekly US inventory report. Brent crude settled 28 cents or 0.6 per cent ahead at US$44.43 a barrel.

Aluminium hit its highest point since January following Monday's round of strong manufacturing data from China, Europe and the US. Benchmark aluminium on the London Metal Exchange climbed 1.1 per cent to US$1,731.85 a tonne. Nickel gained 1.2 per cent, lead 0.7 per cent and zinc 0.7 per cent. Copper gave up 0.6 per cent and tin 1.4 per cent.

The dollar surged 0.54 per cent this morning to 71.6 US cents.


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