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ASX to open higher, US stock end mixed as Powell keeps rate options open - 09/03/23

Market Wrap

U.S. stocks ended mixed as investors parsed a second day of congressional testimony from Federal Reserve Chairman Jerome Powell and considered another signal of a hot labour market.
The S&P 500 closed up 0.1%, while the Dow Jones Industrial Average slipped 0.2%. The Nasdaq Composite Index increased 0.4%.
In his second session of testimony to Congress, Powell said the central bank was keeping its options open about future rate increases and that coming economic data would strongly influence the rate decision at the Fed's March 21-22 meeting.
Also, the U.S. private sector added 242,000 jobs in February, according to the ADP employment report -- above economists' forecasts.
In Asia earlier, Japan's Nikkei Stock Average ended 0.5% higher, led by gains in electronics stocks, as the yen weakened to the lowest level in nearly three months against the dollar due to the prospects of the Fed's further tightening.
Chinese shares ended mixed, paring some of the morning's losses as investors digested Powell's comments that the Fed could raise rates more than previously expected and Beijing's plan to consolidate financial regulation under one entity. The benchmark Shanghai Composite Index edged 0.1% lower. The Shenzhen Composite Index closed 0.3% higher while the ChiNext Price Index dropped 0.3%.
Elsewhere, New Zealand's NZX-50 finished 0.5% lower amid rekindled fears that global inflation may not yet be under control. Shares in eight of the 10 largest companies by market capitalization fell. The NZX-50's losses were spread across sectors, with larger stocks mostly underperforming the broader market.
And Australia's S&P/ASX 200 closed 0.8% lower after concerns that U.S. interest rates are some way from peaking overtook optimism that local inflation has topped out. Nine of the ASX 200's 11 sectors finished lower, with only healthcare and telecommunications eking out minor gains.

Movers & ShakersToday's Announcements

No local data
China February CPI and PPI at 12.30pm AEDT; Japan fourth quarter GDP final


Oil futures marked a second straight decline, pressured by the Fed chairman's remarks on the outlook for U.S. interest rates.
West Texas Intermediate crude for April delivery fell 1.2% to settle at $76.66 a barrel on the New York Mercantile Exchange. May Brent crude, the global benchmark, fell 0.8% to $82.66 a barrel on ICE Futures Europe.
Powell's comments before the Senate Tuesday "sent the clear message that economic data in the near term will be critical for the decision-making process on the pace of future rate hikes and eventually the terminal rate," said Tyler Richey, co-editor of Sevens Report Research. That left traders focused on Wednesday's labor-market reports, he said.
Gold prices ended with a modest loss, a day after the most-active contract suffered its second-biggest daily drop of 2023 following Powell's comments suggesting bigger interest-rate rises may be necessary to quell inflation.
April gold prices ended edged down by nearly 0.1%, to settle at $1,818.60 per ounce on Comex.
"We know that the Fed's comments have brought life back to the dollar index and this is not so much of good news for the yellow metal," said Naeem Aslam, chief investment officer at Zaye Capital Markets.


(All news & data sourced from Aspect Huntley / AFR / The Australian / Bloomberg / Reuters / CNBC / Wall Street Journal / Morningstar / OPTO / Trading Economics)


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