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Global market update: APAC shares fall as US equities dip

EditorOliver Gray
Published 03/04/2024, 11:24 am
Updated 03/04/2024, 11:24 am
© Reuters.

Investing.com - Asian-Pacific (APAC) shares opened lower on Wednesday, echoing the downward trend observed across all major US benchmarks.

By 11:20 am AEDT (12:20 am GMT) the S&P/ASX 200 lost 0.7% while the KOSPI 200 and the Nikkei 225 declined 1.1% apiece.

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On Tuesday, US stock indices closed in the red. The S&P 500 fell by 0.7% to 5,205.81, the Dow Jones Industrial Average declined by 1.0% to 39,170.24, and the Nasdaq Composite lost 1.0% to conclude at 16,240.45.

Longer-dated US government bond yields rose on Tuesday. The US 10-year Treasury yield increased by 4 points to 4.35% after earlier climbing to 4.405% in the session, the highest level since November. However, the US 2-year Treasury yield fell by 1.5 points to 4.69%.

In the currency market, the Euro and the Australian dollar strengthened against the US dollar. The Euro rose from $US1.0723 to $US1.0777, and the Aussie dollar lifted from US64.85 cents to US65.22 cents. The Japanese yen also firmed from 151.78 yen per US dollar to JPY151.47.

Global oil prices rose 1.7% on Tuesday to reach the highest level since October, sparked by new threats to oil supplies from Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East. Brent crude price increased by $US1.50 or 1.7% to $US88.92 a barrel.

Base metal prices also rose on Tuesday, with copper futures up 0.6% due to strong factory data from China and plans to cut production by smelters in the top consumer country. Aluminium gained 1.6%.

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Gold futures price increased by $US24.70 or 1.1% to $US2,281.80 an ounce on Tuesday as traders sought the safe-haven asset amidst growing Middle East tensions. Spot gold was trading near $US2,276 an ounce at the US close after hitting an all-time high of $US2,276.89.

Iron ore futures rose US58 cents or 0.6% to $US102.91 a tonne on Tuesday as Chinese factory activity showed signs of a modest recovery, ending a five-month contraction in March.

In Asia, Chinese shares took a hit after three consecutive sessions of growth, with software and tech hardware stocks leading the plunge. Real estate shares also experienced a broad fall, with China Vanke at the forefront, as investors reacted to its disappointing 2023 results amidst persistent concerns about the property sector. On the flip side, energy stocks saw a rise due to the escalating Israel-Hamas conflict.

Hong Kong shares closed higher on the first trading day after the Easter holiday, buoyed by robust March PMI data from China, suggesting the economy's recovery may be on track.

Japan's Nikkei Stock Average closed slightly higher at 39838.91, as gains in chip stocks counterbalanced losses in retail and shipping shares. In contrast, India's Sensex closed marginally lower at 73903.91, weighed down by finance stocks.

In Europe, shares closed lower, with the STOXX Europe 600 Index falling 0.18% to 508.57, the CAC 40 Index slipping 0.9% to 8,130.05, and the DAX dropping 1.1% to 18,283.13.

The FTSE 100 in the UK closed down 0.20% at 7938 points on Tuesday, despite an earlier rise in the session. A surge in manufacturing activity reignited inflation concerns.

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