Fears over the health of the global economy are driving major declines in global markets, with the Australian stock market in negative territory.
Australian stocks took a shaky move on Wednesday morning as fears over the health of the global economy continue to circulate worldwide.
In the first 15 minutes after opening, the S&P/ASX 200 index fell 0.5 percent. It rebounded 0.3 percent to 6650.00 at 10:50 a.m. AEST, before returning to negative territory, according to the Australian, which has seen significant changes.
The benchmark index fell 0.3 percent to 6610.20 at 12:11 a.m. AEST.
The tech sector has been the best performer, while energy and materials have taken a hit as expected.
Oil prices have fallen sharply, with the major international crude oil contract, Brent North Sea, falling nearly 10 percent, while the major US contract, West Texas Intermediate, has fallen more than 8 percent to enter for the first time. about two months.
At around 12:30 PM, the Australian Financial Review the S&P/ASX 200’s best on Wednesday listed as Zip Co, Megaport, Tyro, EML Payments and Mesoblast.
The worst were Beach Energy, St Barbara, Regis Resources, South32 and Graincorp.
The Australian stock market ended Tuesday higher for the second day after the Reserve Bank of Australia raised the official cash interest rate another 0.5 percent – the third consecutive monthly increase.
On Wall Street, the Dow Jones Industrial Average closed at -0.4 percent, the S&P 500 at +0.2 percent and the Nasdaq Composite Index at +1.8 percent.
The yield on the US 10-year bond fell to 2.81 percent.
The Australian dollar had fallen close to $67.95c at the close of the US, but was not as bad as the euro, which plunged to a 20-year low.
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Euro slumps amid recession fears
European equities fell along with oil prices local time on Tuesday, while the euro slipped to parity with the dollar on mounting fears of a recession as central banks contend with rising inflation.
European stock markets fell nearly 3 percent, heavily on Wall Street early in the day before US stocks reversed.
“There is fear circulating about the health of the global economy and that is why we are seeing major declines in equities, energy and industrial metals,” said market analyst David Madden of Equiti Capital.
The euro plunged to a low in the 20-year dollar of $1.0238 as investors eyed aggressive rate hikes by the US Federal Reserve in its fight against inflation, as opposed to the European Central Bank, which planned to be more modest plan increases.
“There are growing concerns that high energy prices will reduce demand, hence the drop in oil contracts,” Madden said.
Sentiment in Europe was shaken by the latest survey data showing that economic growth in the eurozone faltered in June.
S&P Global’s watchful monthly purchasing managers index (PMI), which measures business confidence, fell to 52.0 in June from 54.8 in May.
Nevertheless, the reading, which was a 16-month low, remains above the 50-point signal expansion.
“Growing fears of a recession are pushing the euro down, while the dollar rises on bets that the Fed will continue to raise rates aggressively to tame inflation,” City Index analyst Fiona Cincotta told AFP.
“Today’s PMI data from Europe has highlighted the risk of a slowdown in growth towards the end of the second quarter and raised the prospect of a contraction in activity in the coming months.”
XTB chief market analyst Walid Koudmani said: “The ECB (European Central Bank) is caught between a rock and a hard place as it needs to raise interest rates to tackle inflation and boost its currency, all the while supporting struggling economies that just recovering after two years.” years of pandemic-related problems.”
While US stocks were deep in the red in the morning, shares rose in the afternoon, allowing two of the three major indices to finish higher.
The shift came as yields on the 10-year US Treasury bill, a measure of interest rates, fell further below 3 percent.
“Concerns about a recession are mounting,” said Quincy Krosby of LPL Financial, who noted the correlation between technology stocks and declines in government bond yields.
“You look for growth where you can find it,” said Dr. Krosby. “Many of those big tech names that have been beaten up by the market are becoming attractive again, especially when bond yields are lower.”
Key figures around 2030 GMT
Euro/dollar: DOWN to $1.0266 from $1.0422 Monday
Pound/Dollar: DOWN to $1.1956 from $1.2118
Euro/pound: DOWN at 85.85 pence from 86.00 pence
Dollar/yen: UP at 135.87 yen from 135.62 yen
Brent North Sea Crude Oil: 9.6 Percent DOWN at $102.57 a Barrel
West Texas Intermediate: 8.8 percent DOWN at $98.94 a barrel
New York – Dow: DOWN 0.4 percent 30,967.82 (close)
New York – S&P 500: 0.2 percent higher at 3,831.39 (close)
New York – Nasdaq: 1.8 percent higher at 11,322.24 (close)
London – FTSE 100: DOWN 2.9 percent to 7,025.47 (close)
Frankfurt – DAX: 2.9 percent DOWN at 12,401.20 (close)
Paris – CAC 40: 2.7 percent DOWN at 5,794.96 (close)
EURO STOXX 50: DOWN 2.7 percent at 3,359.83 (close)
Tokyo – Nikkei 225: 1.0 percent higher at 26,423.47 (close)
Hong Kong – Hang Seng Index: 0.1 percent higher at 21,853.07 (close)
Shanghai – Composite: FLAT on 3.404.03 (close)
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