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Overseas Market Report

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Overseas Market Report - International Markets Roundup

Wednesday 21 August 2019 | Close

[Morningstar with AAP]: Wall Street's main indexes have risen as upbeat earnings from retailers pointed to strength in US consumer demand, and held gains after minutes from last month's Federal Reserve meeting showed policymakers had debated a more aggressive interest rate cut.

Wednesday 21 August 2019 | Close

Foreign Equities Close Change %Change
Dow Jones (US) 26203 240 0.93
S&P 500 2924 24 0.82
NASDAQ 8020 72 0.90
FTSE 100 Index 7204 79 1.11
DAX 30 11803 152 1.30
CAC 40 5435 91 1.70
Nikkei 225 (Japan) 20619 -59 -0.28
HKSE 26270 39 0.15
SSE Composite Index 2880 0 0.01
NZ 50 10709 -95 -0.87

Wednesday 21 August 2019 | Close

Commodities US$ Close Change %Change
Aluminium /t 1750 -1 -0.07
Copper /t 5707 24 0.42
Nickel /t 15857 -21 -0.14
Gold /oz 1503 0 0.01
Silver /oz 17.1 0.1 0.26
Oil - West Texas crude /bbl 55.7 -0.4 -0.80
Lead /t 2083 26 1.25
Zinc /t 2291 74 3.34

Wednesday 21 August 2019 | Close

Currency Close Pts Change % Change
$A vs $US 0.6782 0.0011 0.16
$A vs GBP 0.5590 0.0023 0.41
$A vs YEN 72.27 0.30 0.42
$A vs EUR 0.6114 0.0012 0.20
$A vs $NZ 1.0591 0.0026 0.24
$US vs Euro 0.9015 0.0005 0.06
$US vs UK 0.8242 0.0022 0.26
$US vs CHF 0.9819 0.0041 0.41

[Morningstar with AAP]: Wall Street's main indexes have risen as upbeat earnings from retailers pointed to strength in US consumer demand, and held gains after minutes from last month's Federal Reserve meeting showed policymakers had debated a more aggressive interest rate cut.

Asia

Stocks in Shanghai were little changed on Wednesday as investors awaited more signals on policy easing at home and abroad, with trade risks continuing to weigh on sentiment.

At the midday break, the Shanghai Composite index was flat at 2,880.52 points, the blue-chip CSI300 index was down 0.1 per cent but Hong Kong's Hang Seng Index was up by the same margin at

26,260.52.

Hong Kong stocks closed a tick higher on Wednesday, while markets bet on central banks to ease policy and stave off fears of global economic slowdown amid consistent headwinds from the Sino-U.S. trade dispute.

At the close of trade, the Hang Seng index was up 0.2 per cent at 26,270.04 points. The Hang Seng China Enterprises index ended 0.4 per cent firmer.

Around the region, MSCI's Asia ex-Japan stock index was flat while Japan's Nikkei index was down 0.4 per cent

Europe

European shares fell on Tuesday after two sessions of robust gains as optimism over hopes of stimulus in major economies waned and investors awaited more guidance from central banks.

Concerns about Italy's government further dented sentiment, though Italian bond yields fell after Prime Minister Giuseppe Conte said he would resign, potentially paving the way for a new coalition government.

Markets in Italy have been volatile since the leader of the League, Matteo Salvini, pulled support from his coalition arrangement with the 5-Star Movement on 8 August.

Milan's blue-chip index ended 1.1 per cent lower, a reaction that analysts said was relatively mild because the possibility of the prime minister's resignation was more or less priced in and after Salvini said he was ready to keep the coalition government alive to approve a 2020 budget before heading to early elections.

The pan-European STOXX 600 index which rose in the early hours of trading reversed course in the afternoon to end 0.7 per cent lower. Madrid shares led the declines.

All sub-sectors ended in the negative with interest-rate sensitive banks weighing the most on the benchmark index. Eurozone bond yields also fell back towards record lows.

The basic resources sector fell over 1 per cent after BHP said that headwinds to global growth could hit demand for its main commodities, iron ore and copper.

In a bright spot, Pandora, the Danish jewelry maker, jumped over 10 per cent to the top of the STOXX 600 index. Despite a drop in second-quarter earnings, Pandora maintained its full-year forecast

European equities had staged a comeback in the last two sessions on growing hopes that central banks and governments will step in to help global economies stave off a recession.

However, the pan European STOXX 600 index is still down 3.4 per cent for a month so far, lagging the 10-year average.

Investors will now be looking forward to the Jackson Hole Symposium on Thursday where substantive comments from U.S. Federal Reserve Chief Jerome Powell and European Central Bank head Mario Draghi are expected.

N America

Wall Street's main indexes have risen as upbeat earnings from retailers pointed to strength in US consumer demand, and held gains after minutes from last month's Federal Reserve meeting showed policymakers had debated a more aggressive interest rate cut.

US stocks moved solidly higher following better-than-expected results from retailers Target and Lowe's.

Target shares surged 20.4 per cent on Wednesday after the big-box retailer raised its annual earnings forecast.

Lowe's shares climbed 10.4 per cent after the home-improvement chain beat profit estimates.

Robust US consumer spending has helped stave off fears of an impending recession.

Concerns about an economic slowdown rose as the yield curve between two-year and 10-year Treasuries briefly inverted last week.

Though the yield curve again briefly inverted on Wednesday, it had little impact on stocks this time around.

Some participants preferred a 50-basis-point cut, but the committee was united in wanting to avoid the appearance of being on a path to further rate cuts.

The Dow Jones Industrial Average rose 240.29 points, or 0.93 per cent, to 26,202.73, the S&P 500 gained 23.92 points, or 0.82 per cent, to 2924.43 and the Nasdaq Composite added 71.65 points, or 0.90 per cent, to 8020.21.

Fed Chair Jerome Powell is scheduled to speak on Friday at the central bankers' conference in Jackson Hole, Wyoming.

Several market strategists said Powell's comments at the conclave would offer greater insight on the course of monetary policy than the minutes from the July Fed meeting given developments since then, including US President Donald Trump's announcement of tariffs on an additional $US300 billion worth of Chinese goods.

On Wednesday, the nonpartisan Congressional Budget Office said changes in US and foreign trade policies since January 2018 would reduce inflation-adjusted US gross domestic product by 0.3 per cent from what it would be otherwise by 2020.

Among individual stocks, shares of Toll Brothers slipped 4.5 per cent after the luxury homebuilder posted a decline in orders, hinting at weaker demand for new homes.

Australian Market

Local Markets Are Expected to Open Higher

Ahead of the local open SPI futures were 27 points higher at 6,466.

Wednesday 21 August - close [Morningstar with AAP]: The Australian share market has given up most of its gains from Tuesday, as markets around the world turned skittish ahead of a key meeting of central bankers.

The benchmark S&P/ASX200 index finished Wednesday down 61.7 points, or 0.94 per cent, to 6,483.3 points, while the broader All Ordinaries was closed down 54.8 points, or 0.83 per cent, to 6,572.6.

With global markets having been driven higher most of the year driven by lower interest rates, traders were cautious ahead of the release of minutes from the US Federal Open Market Committee (FOMC) and the European Central Bank, as well the start of an annual meeting of central bankers at Jackson Hole, Wyoming, said IG market analyst Kyle Rodda.

"We're looking at a market that's just taking risk off the table today," Mr Rodda said.

Wednesday's drop "is disappointing, but not a surprise given the negative lead from Wall Street," where the S&P500 dropped 0.8 per cent, said Burman Invest portfolio manager Julia Lee.

The mining, industrial, consumer staples and property trusts were all down between 1.4 and 2.0 per cent, while health care, tech stocks and utilities the only sectors to post gains.

Earnings were sharply in focus during another busy day in reporting season.

Market darling A2 Milk fell 13.2 per cent to $13.89 after reporting full-year earnings growth of 46.1 per cent to $NZ413.6 million ($A391m), a bit below analyst predictions.

"The curse of high expectations," Mr Rodda said. "It's slightly disappointing but there's plenty for the company to crow about."

Iluka Resources fell 10.6 per cent after the mineral sands producer said its underlying half-year earnings had fallen 6.7 per cent to $232.7 million as trade tensions tampered demand for zircon.

Nearmap fell 9.6 per cent to a four-year low $2.84 after the aerial mapping company said its full-year net loss jumped from $11 million to $14.9 million.

On the positive side of things, McMillan Shakespeare gained 17.8 per cent to a six-month high of $15.47 after the salary packaging company said underlying full-year net profit fell 5.1 per cent to $88.7 million.

Wisetech Global rose 11 per cent to $30.76 after the logistics software company said its full-year profit rose 32.7 per cent to $54.1 million.

Carsales.com gained 10.9 per cent to hit an all-time high of $15.57 after its adjusted earnings grew seven per cent to $210 million, despite tough market conditions.

Elsewhere, the big banks were all lower, led by Westpac, which fell 1.8 per cent to $27.52.

ANZ was down 1.2 per cent to $26.37, NAB dropped 0.7 per cent to $27.15 and Commonwealth was down 0.1 per cent to $77.02.

The mining sector saw collective losses of 2.0 per cent as the price of iron ore fell 2.6 per cent, with BHP dropping 2.9 per cent to $35.25, Rio Tinto falling 2.5 per cent to $83.70 and Fortescue Metals down 4.1 per cent to $7.27.

Gold miners were mixed, with Saracen Minerals up 1.7 per cent and Newcrest up 0.4 per cent, but Evolution fell 2.0 per cent and Northern Star was down 0.4 per cent.

The Aussie dollar is buying 67.75 US cents, from 67.83 US cents on Tuesday.

ON THE ASX

The benchmark S&P/ASX200 index closed down 61.7 points, or 0.9 per cent, to 6,483.3

The All Ordinaries closed down 54.8 points, or 0.8 per cent, to 6,572.6

The NZX 50 Lost -94.52 points (-0.88%) to 10,709.32

Annual General Meetings today (ASX 300)

  • No Annual General Meetings today

Companies trading ex-dividend today (ASX 300)

  • Domain Holdings Australia Limited
  • JB Hi-Fi Limited
  • Newcrest Mining Limited
  • QBE Insurance Group Limited

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

  • Infomedia Limited
  • Ingenia Communities Group
  • IPH Limited
  • LendLease Group
  • Steadfast Group Limited
  • Super Retail Group Limited

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