
PT Solid Gold Berjangka | Market Review Thursday, September 28, 2023
Nikkei
Japanese stocks dropped as shares went ex-dividend and investors continued to monitor the risk of higher interest rates.
Topix fell 1.4% to 2,345.51 as of market close in Tokyo.
Nikkei 225 declined 1.5% to 31,872.52.
Out of 2,156 stocks in the Topix, 593 rose and 1,499 fell, while 64 were unchanged. Some 1,149 stocks on the Topix and 168 stocks on the Nikkei 225 traded ex-dividend. The impact would remove 20.8 index points from the Topix and about 223 yen from the Nikkei 225, data compiled by Bloomberg show.
Japan’s 20-year yield rose to the highest since 2014, while the yen remained near 150 per dollar. Meanwhile, the US benchmark oil price hit $95 a barrel for the first time in more than a year and 10-year Treasury yields held near the 4.6% it reached in the previous session, the highest since 2007.
Hang Seng
Hong Kong shares finished Thursday with hefty losses, with investors keeping a wary eye on indebted Chinese property giant Evergrande after its shares were suspended from trading again.
The Hang Seng Index shed 1.36 percent, or 238.84 points, to close at 17,373.03.
The Shanghai Composite Index edged up 0.10 percent, or 3.16 points, to 3,110.48, while the Shenzhen Composite Index on China’s second exchange added 0.44 percent, or 8.31 points, to 1,910.28.
Gold
Gold closed at a fresh since month low on Thursday even as the dollar dropped off a 13-month high.
Gold for December delivery closed down US$12.30 to settle at US$1,878.600 per ounce. the lowest since March 10
The price of the precious metal has suffered due to a strong dollar and treasury yields that have climbed following the Federal Reserve’s hawkish outlook last week that suggested another hike to interest rates before year end.
“High bond yields and a strong greenback are exerting downward pressure on gold prices. But uncertainty is almost entirely negating their impact as investors seek out safe havens like gold. We therefore expect the price of gold to slip slightly over the coming months to end the year at around US$1,880 per ounce” Desjardins Economics wrote.
The dollar moved lower early on Thursday, making gold more affordable for international buyers. The ICE dollar index was last seen down 0.4 points to 106.26.
Treasury yields were mixed. The yield on the US two-year note was last seen down 5.0 basis points to 5.092%, while the 10-year note was last seen paying 4.624%, up 0.8 basis points, after earlier touching 4.684%, the highest since 2007.
Oil
Oil’s rally to $95 a barrel faltered as investors cashed out and the market settled in overbought territory.
US benchmark crude fell nearly $2 after surging to the highest level in more than a year. While dwindling oil inventories at Cushing, Oklahoma — the delivery point for US futures — have sent key price gauges surging, the rally hit technical resistance with the 14-day relative strength index signaling a correction.
Still, the outlook is bullish as supply cuts from Saudi Arabia and Russia continue to tighten the global market. The nearest timespreads for WTI and global benchmark Brent are in extreme backwardation as traders pay bumper premiums to keep crude supplies local. Options trading is showing concerns about bigger price swings.
West Texas Intermediate has rallied about 30% since the end of June and is approaching the biggest quarterly gain since June 2020, when prices gyrated in the early months of the pandemic. Brent has topped $97 in intraday trading this week.
Earlier this month, OPEC forecast a market deficit of as much as 3 million barrels of crude a day in the fourth quarter. With demand in the US and China proving resilient, many in the market now see $100 oil as inevitable, even as the dollar rallies and worries about high global interest rates persist.
WTI for November delivery slid 2% to close at $91.71 in New York.
It touched $95.03 earlier, the highest since August 2022.
Brent for November settlement declined 1% to $95.27.
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