European sharemarkets closed lower on Monday, pulling back from 9-month highs, as fears that the global interest rate hiking cycle could persist for longer than previously expected weighed on rate-sensitive technology (-1.9%) and real estate (-2.1%) shares. Shares of Stockholm-listed real estate firm Fabege dropped 8.7%. Retail stocks fell 2.2% as concerns around elevated China-US geopolitical tensions also weighed on sentiment. Shares of luxury goods maker Kering fell 3.8%. The continent-wide FTSEurofirst 300 index lost 0.7%. The UK FTSE 100 index slid 0.8% from record highs, with shares of Chinaexposed financial services firm Prudential down 4.8%.

US sharemarkets extended losses on Monday on speculation that the US Federal Reserve will keep its monetary policy tight to tame inflationary pressures stemming from a strong labour market. Concerns about higher interest rates weighed on megacap technology stocks like Apple (-1.8%), Amazon.com (-1.2%) and Google-parent Alphabet (-1.8%). Shares of gold miner Newmont slid 4.5% after its US$16.9 billion offer for Australian peer Newcrest Mining. Tyson Foods shares shed 4.6% after missing analysts’ estimates for quarterly revenue and profit. But Tesla shares climbed 2.5% after a US jury on Friday found Chief Executive Elon Musk was not liable for misleading investors when he tweeted in 2018 that he had “funding secured” to take the electric-vehicle maker private. At the close of trade, the Dow Jones index fell by 35 points or 0.1%. The S&P 500 index slid 0.6% and the Nasdaq index shed 119.5 points or 1%.

US government bonds fell on Monday (yields higher) after economic landing, and that the US central bank may have more than one more rate hike left. Bond market investors also awaited Federal Reserve speaker remarks slated for later in the week. US 10-year treasury yields rose by 12 points to 3.65%. And US 2- year treasury yields lifted 19 points to 4.49%.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0797 to lows near US$1.0708 and was near US$1.0725 at the US close. The Aussie dollar fell from highs near US69.47 cents to lows near US68.55 cents and was near US68.85 cents at the US close. And the Japanese yen eased from near 131.58 yen per US dollar to around JPY132.89 and was near JPY132.60 at the US close.

Global oil prices advanced over 1% on Monday as traders weighed a return in demand from China against supply concerns and fears of slower growth in major economies curbing consumption. The Brent crude oil price rose US$1.05 or 1.3% to US$80.99 a barrel. And the US Nymex crude oil price added US72 cents or 1% to US$74.11 a barrel.

 

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Base metal prices tumbled on Monday. The copper futures price fell by 0.5% as doubts about a recovery in demand, tensions between the US and China and a stronger US dollar spurred a sell-off. The aluminium futures price slid 1.4%, but pared losses on reports that the US is preparing to impose a 200% tariff on Russian-made aluminium.

The gold futures price rose US$2.90 or 0.2% to US$1,879.50 an ounce. Spot gold was trading near US$1,868 an ounce at the US close. Iron ore futures fell US92 cents or 0.7% to US$124.34 a tonne due to demand concerns as stockpiles of iron ore increased in China last week.

Originally published by CommSec