ASXSPI200 index futures retreated nine points or 0.1 per cent to 6632, pointing to a subdued start to local trade. The ASX 200 yesterday hovered near break-even all session before closing less than a point higher.
The heat has come out of the rebound in global shares as investors await fresh catalysts. Overnight, the S&P 500 closed 0.01 per cent or less than a point weaker after gains in bank stocks were offset by declines in the technology sector. The tech-heavy Nasdaq eased 16 points or 0.19 per cent. The Dow eked out a rise of 38 points or 0.14 per cent to extend its winning run to four sessions.
The tech sectorstuttered following news of an investigation into Google over potential abuse of the company’s leading market position. The attorneys general of 48 of the 50 US states have signed up for a joint probe. Facebook is already the subject of a similar review. Google is also under investigation by the US Department of Justice.
The market opened higher as traders seized on scraps of positive news about trade negotiations. US Treasury Secretary Steven Mnuchin told an interviewer that China and the US have reached a “conceptual agreement” on intellectual property theft, a sticking point between the two nations. A separate report claimed China last week offered to buy US agricultural goods in exchange for concessions on tariffs and restrictions on Chinese tech company Huawei.
Share markets drew support from expectations of further government stimulus. China yesterday shrugged off news of a sharp downturn in trade activity in August as US tariffs bit. The Shanghai Composite closed 0.84 per cent higher. However, a 3.8 per cent drop in copper imports weighed on trade on the London Metal Exchange. Benchmark London copper declined 0.7 per cent in official rings, lead 0.1 per cent, tin 1.2 per cent and zinc 1 per cent. Aluminium edged up 0.3 per cent and nickel 0.7 per cent.
The big two Australian miners traded mixed overnight despite a sharp rebound in iron ore from two days of declines. BHP’s US-listed stock rose 1.2 per cent and its UK-listed stock shed 0.06 per cent. Rio Tinto gained 0.44 per cent in the US after losing the same percentage in the UK. The spot ore price jumped $3.85 or 4.4 per cent yesterday to $US91.95 a dry tonne.
Oil hit a six-week peak after Saudi Arabia’s new energy minister backed a continuation of OPEC production caps. Brent crude settled $1.05 or 1.7 per cent higher at $US62.59 a barrel. OPEC officials are scheduled to meet this week to discuss the cartel’s production limits.
Gold fell for a third night as US Treasury yields continued to recover. December gold settled $4.40 or 0.3 per cent weaker at $US1,511.10 an ounce. Gold tends to do best when alternative assets, such as government bonds, offer weak returns.
The dollar extended its rebound from last week’s decade low. The Aussie rose a fifth of a cent to 68.6 US cents. The local unit fell as low as 66.88 US cents last week after August retail sales figures missed expectations.
Looking ahead, there is not a lot of economic data scheduled today to change the market dynamic. August business confidence figures are due at 11.30am Eastern Standard Time, along with Chinese inflation data. Wall Street’s calendar is also light-on tonight, with markets potentially in a holding pattern until next week’s central bank meetings.