ASX to open weaker as investors farewell 2020


The Australian sharemarket looks set to start the final session of the year weaker, despite US stocks moving up on the back of stimulus and vaccine optimism .

The SPI futures index, down 0.25 per cent, or 16.5 points, pointed to a soft start as local investors look to close off a turbulent 2020, which has seen the benchmark S&P/ASX 200 index recover from the pandemic-induced lows in March.

Having hit highs of 7162.5 points in February, the index tumbled to a low of 4546 points in March as COVID-19 footprint started to stretch beyond China. The market has since managed to pick itself up, ending the session on Wednesday at 6682.4 points. Meanwhile, the Australian dollar was trading at US76.84 cents, it’s highest level since 2018.

Overnight, Wall Street nudged higher and the US dollar dipped to its lowest in more than two years. All three major US stock indexes were up modestly as recently enacted stimulus and the ongoing rollout of COVID-19 vaccines fed optimism over economic recovery in 2021.

The Dow Jones Industrial Average rose 0.2 per cent, or about 74 points, to post a near-record close of 30409.56. The S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.


“2021 is going to be the beginning of it,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. “My anticipation will probably be more robust in the latter part of 2021.”

“Once there’s the sense of an all-clear sign, we would anticipate a robust response from the consumer,” Mr Keator added.

For now, he suggests the markets are in wait-and-see mode.

“The markets are saying ‘what have you done for me lately?’ and people are going to be focusing on what’s going to happen if we see more and more restrictions due to the pandemic,” he said.

Britain approved a coronavirus vaccine developed by Oxford University and AstraZeneca in the latest development in the rapid progression, testing, approval and deployment of drugs to battle the disease.

Meanwhile, European stocks reversed gains to end a five-day winning streak, closing lower as investors locked in year-end gains.

The pan-European STOXX 600 index lost 0.34 per cent and MSCI’s gauge of stocks across the globe gained 0.33 per cent.

Crude oil prices inched higher on the back of the weaker dollar and a dip in US inventories, but gains were capped by dimming hopes of a demand rebound.

US crude futures gained 0.83 per cent to settle at $US48.40 per barrel and Brent settled at $US51.34 per barrel, up 0.49 per cent on the day.

Gold prices rose, countering a dip in the greenback, although global COVID-19 vaccine rollouts and increased risk appetite limited the safe-haven metal’s gains.

Spot gold added 0.6 per cent to $US1,888.28 an ounce.

With Reuters

Market Recap

A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up here.

Technology and business journalist, with digital experience. Stints at Business Spectator, The Australian. Better than average cook, pretty handy with knives and guitar.

Most Viewed in Business