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Daily Warp Up 03 August 2021

3 Aug 2021 05:44 PM

BP boosts FTSE 100, Aussie rallies

The FTSE 100 hit its highest mark in over two weeks thanks to an impressive rally in oil and banking stocks. BP shares are up over 5% as the energy titan increased its dividend to 5.46 cents, in addition to that, it revealed a $1.4 billion share buyback scheme. The group announced generous returns to shareholders on account of the impressive earnings, and that lifted London’s oil and gas sector. Broadly speaking, the mood in Europe is positive, partially helped by the impressive jobs data from Spain. The unemployment change reading came in at -197,800, the fastest fall in unemployment since the banking crisis era.

There was another volatile session in Asia overnight as the Beijing authorities appear to be moving closer to applying tighter regulation on the gaming sector. Last week, it was the tech sector and the food industry that came under pressure, and now it seems there is a clear pattern emerging. Even though, the news is not good for enterprise, the reaction in the markets seems to be localised to the region. Tencent and NetEase lost ground as the as state-owned media drew comparisons between gaming and the drug “opium” – traders took that as an indication the gaming sector is in the firing line with respect to regulation.

US markets started off on a positive note but now the S&P 500 has been dragged into the red by the selloff in the tech sector, the NASDAQ 100 is -0.3%, while the Dow Jones is fractionally higher.

The Australian dollar is up versus most major currencies in the wake of the Reserve Bank of Australia meeting. As expected, the central bank kept interest rates on hold, but it is keeping its options open with respect to tapering its stimulus package from next month. Considering that some Australian cities are dealing with tighter restrictions now, it came as a surprise to some the RBA might still press ahead with tapering in a couple of months.

WTI and Brent crude oil are in the red again. There has been little in the way of new news but perhaps traders are a little concerned about the broader move towards tougher regulation in China – one of the biggest importers of oil in the world. Yesterday, it was confirmed the Caixin survey of manufacturing in China fell to a 15-month low. Industrial metals, such as copper, platinum and palladium are lower today. The assets are closely linked to the perceived health of the Chinese economy and seeing as there are growing concerns about Covid-19 cases and restrictions in the country, that seems to be behind the fall in the metals.

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