By Vivek Kumar
Moving markets today: Asia stocks mixed, oil and gold prices surge on heightened Middle East tensions; Australia’s March employment falls short; All eyes on Netflix earnings
Wednesday saw a tumultuous day for US stocks, with investors carefully analysing the Federal Reserve’s stance on interest rates alongside disappointing early earnings reports as the financial reporting season kicked off. Across Asia, stock markets displayed mixed performances, with the dollar’s rapid ascent pausing for breath. Meanwhile, oil prices managed a modest rebound on Thursday, offsetting some of the previous session’s losses following the US’s announcement of reinstating oil sanctions on Venezuela and discussions within the European Union regarding potential new restrictions on Iran. Gold prices climbed amid concerns about the possibility of the conflict in the Middle East spreading to other regions, leading to heightened demand for the safe-haven metal. Prime Minister Netanyahu reiterated Israel’s commitment to self-defence amidst calls from Western nations for restraint. Later in the day, a handful of central bankers from both the United States and Europe are set to deliver speeches, while attention remains focused on the release of US jobless claims data and the earnings reports of key players like Blackstone and Netflix. Here are five key takeaways for your day.
Netanyahu said Israel will defend itself despite West calls for caution
On Wednesday, Prime Minister Benjamin Netanyahu emphasized Israel’s autonomy in making decisions regarding its defence strategies. This statement came amidst calls from Western nations for restraint following a series of attacks from Iran.
The United States, European Union, and G7 countries all announced plans to consider imposing tighter sanctions on Iran. These actions are aimed at calming Israel while urging it to exercise restraint in response to the first-ever direct Iranian strikes, which represent a significant shift from decades of indirect confrontations.
Australia’s March employment falls short, jobless rate inches up
In March, Australia witnessed a decline in employment levels after experiencing a significant surge in the previous month, indicating a slower but ongoing trend towards a more relaxed job market.
Data released by the Australian Bureau of Statistics on Thursday revealed a decrease of 6,600 jobs in March compared to February when there was a substantial increase of 117,600 jobs. Economists had predicted a modest gain of 10,000 jobs after the remarkable performance in February. However, there was an increase of 27,900 full-time jobs in March, Reuters reported.
Despite the dip in employment, the unemployment rate saw a slight uptick from 3.7 per cent to 3.8 per cent in March, although this was lower than the expected rate of 3.9 per cent. This suggests that while there was a setback in job creation, the overall labour market remained relatively stable.
Oil edges up as US reinstates Venezuela sanctions
Oil prices saw a modest increase on Thursday, bouncing back slightly from the losses of the previous session. This uptick came after the United States revealed plans to reinstate oil sanctions on Venezuela, and discussions within the European Union hinted at potential new restrictions on Iran.
Brent futures edged up by 0.33 per cent to reach $87.58 per barrel, while US crude futures rose by 0.32 per cent to $87.57 per barrel. Both benchmarks had experienced a 3 per cent decline in the previous session, largely driven by concerns about demand.
The Biden administration made it clear that it would not extend a license, set to expire early Thursday, which had previously provided broad exemptions from Venezuela oil sanctions. This decision was prompted by President Nicolas Maduro’s failure to fulfil his electoral commitments.
Just hours before the deadline, the US Treasury Department announced the issuance of a replacement license, granting companies 45 days to gradually wind down their operations and transactions in Venezuela’s oil and gas sector.
What’s coming up
Later today, a few central bankers from the United States and Europe are set to deliver speeches. Also, investors will keep a close eye on the release of US jobless claims data and the earnings reports from Blackstone and Netflix.
Netflix’s performance in the first quarter is garnering significant attention, especially considering its position in the fiercely competitive streaming industry, where it has experienced a remarkable 258 per cent surge since May 2022. Observers are eager to see how Netflix plans to sustain investor interest amid stiff competition and high expectations, given its substantial market share growth.
It is anticipated that the company will have gained around 5 million subscribers in the first quarter, which ended in March.
Korean stocks defy Wall Street woes in mixed Asian markets
The Dow Jones Industrial Average saw a slight decline of 0.12 per cent, settling at 37,753.31, while the S&P 500 dropped by 0.58 per cent to 5,022.21, marking its longest four-session downturn in over four months, matching a similar decline in early January. Similarly, the Nasdaq Composite fell by 1.15 per cent to 15,683.37.
Meanwhile, despite the US market’s downward trend, South Korea’s stock market surged during early trading on Thursday. The Kospi, the country’s primary index, rose by 1.6 per cent, buoyed by Histeel, a steel pipe manufacturer, which soared by 30 per cent following President Joe Biden’s announcement to increase tariffs on Chinese steel.
The Korean won also strengthened slightly against the dollar, climbing by 0.13 per cent to Won1377.10 per dollar after experiencing a sharp decline earlier in the week. Japan’s Topix index showed a modest uptick of 0.4 per cent, while mainland China and Hong Kong markets saw slight decreases.
However, Japan’s Nikkei N225 index fell by 0.4 per cent, facing a total weekly decline of 4.3 per cent, marking its largest weekly loss since December 2022.
Gold prices experienced a rise on Thursday, driven by concerns about the potential spread of conflict in the Middle East to other regions, leading to increased demand for the safe-haven metal. Spot gold increased by 0.54 per cent to $2,373.50 per ounce.
