Well, it was good while it lasted. After Friday’s triple-digit decline, the FTSE 100 is expected to open the new week below the 7,000-mark with US shift in monetary stance continuing to reverberate through international stock markets.
The worldwide wobble was precipitated by comments on Friday by James Bullard, president of the St Louis Federal Reserve Bank.
Traders are now anticipating rises in interest rates starting late next year, rather 2023 later, while talk has turned to the tapering of the huge support that has allowed stock markets to defy gravity.
The value plays, such as banks, builders and utility firms that are sensitive to the global economic fluctuations, have been hardest hit in the latest bloodletting.
“Federal Reserve official James Bullard became the proverbial bull in a China shop on Friday when he said that the Fed might need to raise rates in late 2022 instead of 2023,” said Jeffrey Halley, market analyst at ONADA.
“That sparked a run for the exit door for equity markets and commodities while the US Dollar powered higher. The US yield curve continued to flatten as long-dated bond yields slumped, notably in the 20-year tenor.
“The major casualty has been the global reflation/cyclical recovery trade. The reaction of markets since the FOMC dot-plotted everybody last week indicates how much cash was in that trade.”
In Asia earlier, Japan was the biggest casualty in the clear-out as the Nikkei 225 dropped 3.6%. Hong Kong’s Hang Seng was off 1.5%, while the Shanghai Composite was barely changed.
Here at home, GlaxoSmithKline’s first-quarter update on Wednesday is eagerly awaited – not for the financial update, but rather for the strategy review that will address some of the criticisms levelled by activist investor Elliott Management.
Also, this week builder Berkeley (LON:BKG) delivers finals, while the Bank of England may add some local context on monetary policy as the Bank of England's rate-setters meet to decide UK borrowing costs.
Around the markets
- Pound US$1.3799 (flat)
- Bitcoin US$34,104.17 (-4.5%)
- Gold US$1,770.60 (flat)
- Brent crude US$73.69 (+0.2%)
6.50am: Early Markets - Asia / Australia
Stocks in the Asia-Pacific region fell sharply on Monday with Japan’s Nikkei 225 dipping 4% briefly.
China has kept one-year Loan Prime Rate (LPR) unchanged at 3.85% while the five-year LPR was also held steady at 4.65%.
The Shanghai Composite slipped 0.10% and Hong Kong’s Hang Seng index declined 1.37%
In Japan, the Nikkei 225 slumped 3.53% while South Korea’s Kospi fell 0.92%.
Shares in Australia fell, with the S&P/ASX 200 trading 1.61% lower.
Proactive Australia news:
Orthocell Ltd's (ASX:OCC) shares jumped this morning after tabling positive nerve regeneration results one year on from a study testing its nerve repair candidate on quadriplegic patients.
Latin Resources Ltd (ASX:LRS) (FRA:XL5) has commenced of the next phase of aircore drilling at its Noombenberry Kaolin-Halloysite Project, where it recently released a 207 million tonne inferred Mineral Resource Estimate (MRE) at the Cloud Nine Deposit.
Zelira Therapeutics Ltd (ASX:ZLD) (OTCMKTS:ZLDAF) (FRA:G1G) is encouraged that the results of a trial in chronic insomnia patients of its proprietary cannabinoid ZLT101 formulation marketed as Zenivol® have been published in the peer-reviewed journal SLEEP®.
Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (OTCMKTS:TMRFF) (FRA:4W0) is logging and sampling core at the Elizabeth Gold Project in British Columbia, Canada, in preparation for analysis at SGS laboratories in Vancouver, Canada.
BlackEarth Minerals NL (ASX:BEM) has signed an offtake and sales agreement with leading Austria-based graphite processor Grafitbergbau Kaisersberg GmbH to sell up to 2,500 tonnes per annum of expandable graphite worth around US$7.5 million.
Alta Zinc Ltd’s (ASX:AZI) latest bout of exploration has uncovered multiple high-grade zinc intersections with added lead and silver at the Gorno Project in northern Italy.
Bellevue Gold Ltd (ASX:BGL) has secured a speculative buy rating and a price target of A$1.25 from Canaccord Genuity Ltd in a report released by analyst Tim McCormack and associate analyst Tyson Kestel.
RPM Automotive Group Ltd (ASX:RPM) shares have risen following the acquisition of East Coast Tyre Wholesalers, further expanding its Wheel and Tyre Division and maintaining its sustainable growth strategy.
Kangaroo Island Plantation Timbers Ltd (ASX:KPT) has advised that the takeover bid by Samuel Terry Asset Management Pty Ltd as trustee for Samuel Terry Absolute Return Active Fund (STAM) has been unsuccessful with the offer period now closed.
https://news.google.com/__i/rss/rd/articles/CBMijwFodHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL25ld3MvOTUyNzYyL2Z0c2UtMTAwLXNldC10by1vcGVuLWJlbG93LTcwMDAtbWFyay1hbWlkLWEtZmVkLWZ1ZWxsZWQtd29ybGR3aWRlLXdvYmJsZS05NTI3NjIuaHRtbNIBPmh0dHBzOi8vd3d3LnByb2FjdGl2ZWludmVzdG9ycy5jby51ay9jb21wYW5pZXMvYW1wL25ld3MvOTUyNzYy?oc=5
2021-06-21 05:40:00Z
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