Global Factors influencing ASX stocks on 20 December 2023

On 20 December 2023, at AEDT 11:55 AM, the benchmark index S&P/ASX 200 is trading higher today, gaining 45.40 points or 0.61%, and is currently trading at 7,534.50 levels. All 11 sectors are trading higher along with the S&P/ASX 200. The Energy and Materials sectors were the top 2 gaining sectors, up by 1.12% and 0.81% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Higher By 0.64%; Trading Closer To A Record High

On that note, let us look at a few global reasons impacting the stock market today:

1. Some of the key U.S. indices ended higher in their previous session. NASDAQ Composite, Dow jones, NASDAQ-100, and S&P 500 ended higher by 0.66%, 0.68%, 0.49%, and 0.59% respectively.

2. On Tuesday, the S&P 500 reached a new high, showcasing a broader stock rally extending beyond the tech sector. The surge was driven by optimism around potential interest rate cuts. The materials and energy sectors played a pivotal role in the market's ascent, buoyed by an increase in oil prices. Notably, The Mosaic Company, FMC Corporation, and Freeport-McMoRan Copper & Gold Inc experienced gains, attributed to a surge in commodities, particularly copper. This uptick in commodity prices is linked to ongoing expectations that rate cuts will stimulate economic growth and drive demand for metals. The positive market momentum occurred despite the U.S. announcing plans to expand a naval task force for Red Sea shipping protection.

3. Oil prices reached two-week highs on Tuesday amid rising concerns over supply disruptions from Red Sea vessel attacks by Yemeni Houthi militants. The 2% gain followed fears of trade disruptions, underscoring the delicate balance between geopolitical tensions and market dynamics.

4. FedEx shares tumbled more than 7% in after-hours trading following a Q2 earnings miss and a downward revision of full-year revenue guidance. Q2 EPS was US$3.99, below the US$4.19 consensus, with revenue at US$22.2 billion, missing the estimated US$22.37 billion. CEO Raj Subramaniam emphasized operating income growth amid uncertain US demand.

5. The Hang Seng is down by 0.75% and FTSE 100 is up by 0.31%.

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