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Overseas Market Report - International Markets Roundup

Thursday 17 October 2019 | Close

[Morningstar with AAP]: Wall Street advanced on Thursday as investor sentiment was buoyed by a string of corporate earnings results and encouraging geopolitical developments.

Thursday 17 October 2019 | Close

Foreign Equities Close Change %Change
Dow Jones (US) 27026 24 0.09
S&P 500 2998 8 0.28
NASDAQ 8157 33 0.40
FTSE 100 Index 7182 14 0.20
DAX 30 12655 -15 -0.12
CAC 40 5673 -24 -0.42
Nikkei 225 (Japan) 22452 -21 -0.09
HKSE 26848 184 0.69
SSE Composite Index 2977 -1 -0.05
NZ 50 11153 11 0.10

Thursday 17 October 2019 | Close

Commodities US$ Close Change %Change
Aluminium /t 1724 2 0.10
Copper /t 5713 13 0.22
Nickel /t 16370 -165 -1.00
Gold /oz 1492 3 0.20
Silver /oz 17.6 0.2 0.99
Oil - West Texas crude /bbl 53.9 0.6 1.07
Lead /t 2211 43 1.97
Zinc /t 2472 7 0.26

Thursday 17 October 2019 | Close

Currency Close Pts Change % Change
$A vs $US 0.6829 0.0076 1.12
$A vs GBP 0.5298 0.0031 0.58
$A vs YEN 74.17 0.76 1.03
$A vs EUR 0.6137 0.0040 0.65
$A vs $NZ 1.0754 0.0011 0.10
$US vs Euro 0.8986 -0.0040 -0.45
$US vs UK 0.7758 -0.0040 -0.51
$US vs CHF 0.9875 -0.0065 -0.65

[Morningstar with AAP]: Wall Street advanced on Thursday as investor sentiment was buoyed by a string of corporate earnings results and encouraging geopolitical developments.

Asia

China's major stock indexes ended roughly flat on Thursday in thin trading, as caution prevailed as investors awaited more details on a proposed Sino-US trade deal.

The blue-chip CSI300 index rose 0.1 per cent, to 3,925.22, while the Shanghai Composite Index slipped 0.1 per cent to 2,977.33.

Hong Kong stocks climbed to end at a one-month high on Thursday, on hopes that more stimulative measures would be rolled out to bolster the island city's growth amid months-long protests.

The Hang Seng index rose 0.7 per cent, to 26,848.49, while the China Enterprises Index gained 0.5 per cent, to 10,588.17.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.11 per cent, while Japan's Nikkei index closed down 0.09 per cent.

Europe

European shares edged lower on Thursday, as strong earnings from Sweden's Ericsson were offset by fading optimism over the Brexit deal amid investor worries about its support in the British parliament.

The pan-European STOXX 600 index closed down 0.1 per cent after gaining as much as 0.9 per cent, as investors initially cheered news that the European Union and Britain had clinched a deal on the terms of Britain's exit from the bloc.

Shares in domestically focused British companies and Irish firms, which have come to be seen as a barometer on Brexit sentiment, gave up gains as the Northern Irish Democratic Unionist Party (DUP) said it would vote against the accord at an extraordinary session on Saturday.

The FTSE midcap index closed up just 0.16 per cent, while Irish stocks dropped 0.9 per cent amid doubts over whether Prime Minister Boris Johnson will be able to win the British parliament's approval for any deal.

The pound saw wild swings, sending London's internationally focused FTSE 100 lower initially but the index closed up 0.2 per cent with help from blue-chip firms.

France's CAC 40 eased 0.4 per cent after hitting a fresh 12-year high earlier, while Germany's DAX closed down 0.1 per cent, although near its strongest level in over a year. An index of eurozone stocks fell 0.2 per cent.

Fears of a slide into recession continue to dog Europe and not all earnings were upbeat, with Swiss banking software maker Temenos tumbling more than 15 per cent, its worst day in more than five years, after traders said third-quarter core profits missed expectations.

Swedish telecoms gear maker Ericsson was a bright spot, jumping 6 per cent to hit a three-month high after posting quarterly core earnings that were well ahead of expectations. Shares of Finnish peer Nokia also gained 2 per cent.

Nestle was the biggest drag on the benchmark index as organic sales growth dipped in the third quarter, outweighing the announcement of a plan to buy back up to 20 billion Swiss francs ($20.13 billion) in shares.

Shares of Pernod Ricard fell 4.2 per cent after the spirits maker missed expectations for quarterly organic sales, reflecting slower growth rates in China and India. French car parts group Faurecia dropped 6.5 per cent after posting lower-than-expected third quarter sales.

Wirecard's shares, down over 2.5 per cent, extended their slide in the wake of an FT report alleging its effort to inflate sales and profits. Shares in SAP SE and Capgemini came under pressure after weaker results from US tech company IBM.

N America

Wall Street advanced on Thursday as investor sentiment was buoyed by a string of corporate earnings results and encouraging geopolitical developments.

A broad-based rally led all three major US stock averages to moderate gains.

Britain and the European Union agreed to a severance deal, moving closer toward wrapping up three years of uncertainties after Britons voted to leave the bloc.

Upbeat statements from Beijing and Washington fuelled hopes that a phased agreement could ease the long-running US-China trade war that has rattled markets for months.

And Turkey agreed to pause its Syria assault to allow for the withdrawal of Kurdish forces.

Analysts now see third-quarter S&P 500 earnings falling by 2.9 per cent, according to Refinitiv I/B/E/S, marking the first contraction since the earnings recession that ended mid-2016.

But of the 63 companies in the S&P 500 that have reported so far, 82.5 per cent have come in above estimates.

Morgan Stanley rounded out big bank earnings with better-than-expected third-quarter profits, driven by bond trading and M&A advisory strength, sending its shares up 1.5 per cent.

Streaming pioneer Netflix Inc advanced 2.5 per cent after the company reported a rebound in subscribers in the third quarter.

The Dow Jones Industrial Average rose 24.18 points, or 0.09 per cent, to 27,026.16, the S&P 500 gained 8.28 points, or 0.28 per cent, to 2,997.97 and the Nasdaq Composite added 32.67 points, or 0.4 per cent, to 8,156.85.

Of the 11 major sectors in the S&P 500, all but technology closed in the black, with healthcare, real estate and communications services enjoying the largest percentage gains.

In other earnings news, shares of International Business Machines Corp were the biggest drag on the blue-chip Dow, sinking 5.5 per cent after missing quarterly revenue estimates.

Honeywell International's quarterly results fell short of analyst expectations, but positive geopolitical developments helped the international conglomerate gain 2.4 per cent.

Australian Market

Local Markets Are Expected To Open Lower

Ahead of the local open SPI futures were 13 points lower at 6651.

Thursday 17 October 2019 - close [Morningstar with AAP]: The Australian share market has slipped and the local currency gained as investors digested a surprise dip in the country's unemployment rate.

The benchmark S&P/ASX200 index finished Thursday down 51.8 points, or 0.77 per cent, to 6,684.7 points, while the broader All Ordinaries was down 51.7 points, or 0.76 per cent, to 6,791.5 points.

The market started dropping after the 1130 AEDT release of jobs data showing unemployment edged lower to a seasonally adjusted 5.2 per cent in September, a modest decline that economists said would give the Reserve Bank of Australia more time before cutting the cash rate for a fourth time this year.

The Aussie dollar rose 0.4 per cent on the news, buying 67.83 US cents, from 67.38 US cents on Wednesday.

But every sector of the ASX was lower except for energy companies, which gained slightly.

The tech and mining sectors were the biggest losers, down 2.4 and 2.0 per cent, respectively.

BHP fell 3.3 per cent to $34.86 after posted a slight dip in its September quarter iron ore production due to planned maintenance at a key port, while Fortescue Metals dropped 4.0 per cent to $8.16 and Rio Tinto dipped 2.9 per cent to $87.22.

South32 gained 1.6 per cent to $2.50 after announcing a 9.0 per cent rise in coking coal production for the first quarter after ramping up production at its Illawarra project in NSW.

Northern Star tumbled 8.0 per cent to $10.25 after announcing that its Pogo gold mine in Alaska was producing a lower grade of gold at high cost, although executives were still bullish on the acquisition.

All of the big banks were lower, with Commonwealth down 0.4 per cent to $80.11, Westpac down 0.6 per cent to $29.08, ANZ down 0.8 per cent to $27.95 and NAB down 0.1 per cent to $28.86.

But IOOF was up 10.9 per cent to $7.05 after ANZ agreed to lower the price that the wealth manager would have to pay for its pension assets by 13 per cent.

Bank of Queensland was 2.4 per cent lower after announcing a 14 per cent drop in full-year earnings that new chief executive George Frazis said underscored the need for change in the regional lender's culture and business practices.

IAG was flat at $7.95 after the insurance company said it was selling its stake in Indian firm SBI General.

Wisetech Global fell 10.2 per cent to a two-month low of $30 before being placed in a trading halt after a US-based short selling group released a research report accusing the logistics company of deceptive accounting.

Wisetech said it was formulating a response to the allegations.

Elsewhere in the tech sector, Afterpay Touch continued to fall after a bearish analyst report, dropping 5.7 per cent to $31.98.

Woodside Petroleum helped prop up the energy sector, gaining 0.7 per cent to $32.12 after announcing its production for the third quarter was up 44 per cent.

Looking ahead, X-Chainge founder Nick Twidale said the market was not convinced about the supposed trade "deal" between the US and China and there was still a chance for a major correction.

"We need consistency and confidence that there's going to be a trade deal and that there's smooth sailing ahead," he said.

ON THE ASX:

* The benchmark S&P/ASX200 index closed down 51.8 points, or 0.77 per cent, to 6,684.7 points

* The All Ordinaries closed down 51.7 points, or 0.76 per cent, to 6,791.5 points.

* The NZX 50 added 10.88 points (0.10%) to 11152.74

Annual General Meetings today (ASX 300)

  • Event Hospitality and Entertainment Ltd
  • SkyCity Entertainment Group Limited

Companies trading ex-dividend today (ASX 300)

  • No Companies trading ex-dividend today (ASX 300)

Companies trading ex-dividend next business day (ASX 300)

  • New Hope Corporation Limited

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