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Morning markets: Wall Street fizzles as oil drops

Tuesday, 23 Aug 2016 06:24:18 | Thuy Ong

Wall Street was under pressure as oil lost more than 3 per cent. (Brendan McDermid, file photo: Reuters)

US markets ended mostly flat overnight, as biotech shares helped buoy the market but a drop in oil prices weighed on energy stocks.

Markets at 7:51am (AEST)

  • ASX SPI 200 futures +0.1% to 5,494
  • AUD: 76.3 US cents, 58.1 British pence, 67.4 euro cents, $NZ1.046
  • US: Dow Jones -0.1% to 18,529, S&P 500 -0.1% to 2,183, Nasdaq +0.1% to 5,245
  • Europe: FTSE -0.4% to 6,829, DAX -0.5% to 10,494, CAC 40 -0.2% to 4,390
  • Commodities: Gold slips to $US1,339 an ounce, West Texas Crude -3.5% to $US46.80 a barrel, iron ore steady at $US61.10 a tonne.

Oil prices lost more than 3 per cent as investors worried about growing Chinese fuel exports, crude shipments from Iraq and Nigeria and a rise in the number of oil rigs in the US.

Drug maker Medivation soared nearly 20 per cent after global pharmaceutical company Pfizer said it would acquire the company for $US14 billion.

Meanwhile, investors will also eye a key US Federal Reserve meeting on Friday, where Fed chair Janet Yellen will make a closely watched speech and investors will look for clues to potential interest rate hikes in the coming months.

"The markets seem to be already discounting the possibility that Yellen may look to talk up a September rate hike," said Angus Nicholson, analyst at IG in a note to clients.

"It seems that it would require a quite noticeably more hawkish Yellen speech than we've seen in recent times to stop the US dollar selling off."

The market has priced in an 18 per cent chance of a rate hike for September, according to Reuters.

Overnight, European stocks closed mixed after a choppy session, with weaker commodity stocks dragging on the bourses.

Locally, shares are set to open modestly higher, with the ASX SPI 200 up 0.1 per cent to 5,495 with a raft of companies expected to report.

Today's agenda

  • Australia: Healthscope FY result (8:15am), Oil Search interim result (8:15am), ANZ consumer confidence (9:30am)
  • US: Markit "Flash" PMI August 11:45pm (AEST), new home sales July 12:00am (AEST)
  • Europe: Markit "Flash" PMI August 6:00pm (AEST)
  • Japan: Nikkei PMI August 11:00pm (AEST)

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