Australian stocks are expected to start the day lower after global stock markets fell, pulled down by technology stocks in Europe and on Wall Street.
- The ASX 200 closed up 0.1 percent on Monday to 7,485 points
- US stocks are falling on the upcoming CPI outlook
- Brent crude fell below $ 100 overnight
ASX futures fell 27 points or 0.4 percent to 7,435 at. 6:58 AEST.
The Australian dollar fell to 74.16 US cents this morning.
Price-sensitive growth stocks lead to declines
Wall Street closed sharply lower on Monday as investors kicked off the shortened holiday week in a risk-off mood, with rising bond yields weighing on market-leading growth stocks ahead of crucial inflation data.
All three major U.S. stock indices ended deep in negative territory, with tech and tech-related stocks pulling Nasdaq down 2.2 percent.
“There have been two kinds of divestitures within the last month or two,” said Peter Tuz, president of the Chase Investment Council in Charlottesville, Virginia.
“There are the rising interest rates that primarily affect tech and other growth stocks, and then there is the recession / economic downturn divestment that affects energy and the names of various materials.
“Today you see both.”
The Dow Jones Industrial Average fell 413.04 points or 1.19 percent to 34,308.08, the S&P 500 lost 75.75 points or 1.69 percent to 4412.53 and the Nasdaq Composite fell 299.21 percent to 4.04 percent to 4 .04 percent to 1.91 percent.
US interest rates hit three-year highs
The benchmark 10-year US government bond yield hovered close to its highest level in three years ahead of key inflation figures expected on Tuesday.
The US Federal Reserve has promised to tackle burning inflation aggressively, and market participants expect broadly 50 basis point rate hikes from the central bank in the coming months.
The Ministry of Labor’s CPI report is expected on Tuesday for any signs that the inflation wave has risen.
Analysts expect the report to show an 8.5 percent year-on-year growth in consumer prices, the warmest reading since 1981.
Influence from Ukraine and China
Ongoing geopolitical strife also helped to secure the flight.
said Ukraine it expected that Russia would soon launch a huge new offensive as the most serious conflict in Europe since the Balkan wars continued in the 1990s, despite ongoing peace talks.
All 11 major sectors in the S&P 500 ended the session in the red, with energy stocks suffering the largest percentage losses.
MSCI’s target for equities across the globe closed up 1.33 percent, and the pan-European STOXX 600 index fell 0.59 percent as regional stock markets fell, with the exception of France’s CAC 40.
Oil prices fell by about $ 4 per barrel. barrel, where Brent fell below $ 100 due to plans to release record amounts of crude oil from strategic reserves and continued COVID-19 lockdowns in China.
Brent crude traded at $ 98.97 per barrel. barrel at 07:00 AEST.
ABC / Reuters