Markets Lift on US Drivers
The problem with economic theory is that every now and then it describes market behaviour well, meaning economists cannot be discarded entirely. In a classic “price signal” response, oil inventory numbers released overnight showed a large draw on gasoline stocks for the week as US drivers took advantage of lower petrol prices.
Despite the tenuous theoretical link between supply side driven lower oil prices and weakening share markets, they again moved in lock step overnight. Oil fell during European trading, and shares took a hit. The German Dax fell more than 3%. Similarly, US markets fell at their opening and the S&P500 was down 1.64%. However, the increased demand for gasoline changed everything. Oil reversed a 4% drop to move 1% higher, and stocks followed, with US markets closing with gains for the session.
This U-turn in sentiment sees Asia Pacific markets set for a positive day. The Australian market was hit harder than most in yesterday’s selling, and may therefore top the 31 point gain indicated by futures markets.
Australian company reporting season draws to a close very soon. Twenty–four top 200 companies will disclose results today, taking the total to 187. Alumina has disappointed, while Perpetual and Seek will likely receive market support after stronger reports. South 32, Village Roadshow and Blackmores may provide further reporting season highlights.
Frequently Asked Questions about this Article…
US drivers took advantage of lower petrol prices, leading to a large draw on gasoline stocks. This increased demand for gasoline helped reverse a 4% drop in oil prices, which then moved 1% higher.
Initially, a drop in oil prices during European trading led to a decline in share markets, with the German Dax falling more than 3% and the S&P500 down 1.64%. However, as oil prices reversed and increased by 1%, stock markets followed suit and closed with gains.
Asia Pacific markets are set for a positive day following the U-turn in sentiment in US markets. The Australian market, which was hit harder than most, may exceed the 31 point gain indicated by futures markets.
The Australian company reporting season is drawing to a close, with 24 top 200 companies disclosing results today, bringing the total to 187.
Perpetual and Seek are likely to receive market support after releasing stronger reports.
South 32, Village Roadshow, and Blackmores may provide further highlights during the Australian reporting season.
The Australian market was hit harder than most during the recent selling, possibly due to its sensitivity to changes in global market sentiment and oil price fluctuations.
Alumina has disappointed in the recent Australian company reporting season.
Call 1300 880 160
Start a chat
Schedule a call
