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Global Market Report - 1 April

Lex Hall  |  01 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to gain following a strong close on Wall St as tech stocks rose and investors cheered the Biden infrastructure plan.

The Australian SPI 200 futures contract was up 32 points, or 0.5 per cent, at 6,798 points at 8.30am Sydney time on Thursday, suggesting a positive start to trading.

The S&P 500 and Nasdaq rose on Wednesday, boosted by gains in technology shares, and the three major Wall Street indexes registered their fourth straight quarterly rise as investors looked forward to details of President Joe Biden’s massive infrastructure plan.

The Dow Jones Industrial Average fell 85.41 points, or 0.26 per cent, to 32,981.55, the S&P 500 gained 14.34 points, or 0.36 per cent, to 3,972.89 and the Nasdaq Composite added 201.48 points, or 1.54 per cent, to 13,246.87.

Locally, non-bank lender Latitude Financial has pulled the trigger on its third tilt at the ASX boards, launching a $200 million initial public offering in a move that will value the company at $2.6 billion, The Australian reports.

Investors had a good day on the Australian share market and their best month since November's record gains.

The S&P/ASX200 benchmark index closed up 52.3 points, or 0.78 per cent, to 6,790.7 on Wednesday.

The index reached a session high of 6,862.6 at about the halfway point of the session, but could not sustain those heights.

Since the pandemic, investors have been reluctant to raise the index to much more than 6,800 points.

For the month, the ASX200 gained 1.76 per cent. That is the highest gain since November's 9.96 per cent, which was a record month for the index.

Meanwhile, the All Ordinaries on Wednesday closed higher by 47.2 points, or 0.68 per cent, to 7,017.

Gold was up 1.4 per cent at $US1,708.49 an ounce; Brent oil was down 0.9 per cent to $US63.57 a barrel; Iron ore was down 0.9 per cent to $US165.15 a tonne.

Meanwhile, the Australian dollar was buying 76.03 US cents at 8.30am, up from 75.99 US cents at Wednesday’s close.

Asia

China stocks ended lower on Wednesday, led by losses in material and property shares, as investors shrugged off data showing manufacturing activity expanded at the quickest pace in three months in March.

At the close, the Shanghai Composite index was down 0.43 per cent at 3,441.91, and the blue-chip CSI300 index slipped 0.91 per cent.

The benchmark index lost 1.9 per cent in March, marking its first monthly loss in six months, while the blue-chip index lost 5.4 per cent this month, marking its worst monthly performance in a year.

In Hong Kong, the Hang Seng Index fell by 199.15 points at 28,802.53.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.31 per cent, while Japan's Nikkei index closed down 0.86 per cent.

Europe

European stocks held steady on Wednesday, trading marginally below all-time highs, while investors maintained a cautious stance after food delivery company Deliveroo’s lacklustre London debut and a slew of corporate earnings.

The pan-European STOXX 600 index inched up 0.1 per cent by 0817 GMT, on course to end March with a 6.5 per cent rise and the first quarter with an 8.1 per cent gain.

Shares in Deliveroo opened well below the price of their initial public offering, and fell as much as 30 per cent to 275 pence. The company priced its initial public offering at 390 pence per share, valuing the company at 7.6 billion pounds ($13.8 billion).

Continental peers Just Eat Takeaway and Delivery Hero fell 2.7 per cent and 1.9 per cent, respectively.

H&M slipped 1.2 per cent after the Swedish retailer reported a quarterly loss and said it would not propose a dividend at its annual general meeting.

Credit Suisse extended losses for a third day on worries its losses linked to the downfall of Archegos Capital, which defaulted on margin calls earlier this week.

French business IT services provider Capgemini rose 1.9 per cent after it raised its medium-term margin targets.

North America

The S&P 500 and Nasdaq rose on Wednesday, boosted by gains in technology shares, and the three major Wall Street indexes registered their fourth straight quarterly rise as investors looked forward to details of President Joe Biden’s massive infrastructure plan.

Bets on a strong economic rebound supported Wall Street during the quarter even as investors got jittery about a retail trading frenzy, a spike in Treasury yields and a US hedge fund going bust.

On Wednesday, the benchmark S&P 500 came close to hitting 4,000 for the first time. The S&P 500 technology index led sector gains, while the energy sector fell and was the weakest sector on the day.

“The trend we’re seeing today is investors rotating back into growth-oriented names that have gotten a little bit beaten up over the past few weeks or so due to underlying rotation toward the economic reopening stocks,” said Michael Sheldon, chief investment officer at RDM Financial Group at Hightower.

Some cyclical sectors could also be taking a breather from their rise because of recent strength in the dollar, he said.

For the quarter, the Nasdaq underperformed the other two major indexes as investors swapped growth-oriented stocks with underpriced shares deemed to benefit most from a full economic reopening. High-flying tech names have been hit by a surge in US 10-year bond yields.

The Dow Jones Industrial Average fell 85.41 points, or 0.26 per cent, to 32,981.55, the S&P 500 gained 14.34 points, or 0.36 per cent, to 3,972.89 and the Nasdaq Composite added 201.48 points, or 1.54 per cent, to 13,246.87.

For the quarter, the Dow gained about 8 per cent, the S&P 500 rose 6 per cent and the Nasdaq increased 3 per cent. For the month, the Dow added about 7 per cent, the S&P 500 rose 4 per cent and the Nasdaq gained just 0.4 per cent.

Biden’s US$3 trillion-US$4 trillion infrastructure package will target traditional projects like roads and bridges alongside investments in the electric vehicle market.

The size and scale of the proposal, as well as how to pay for it, should set the stage for the next partisan clash in Congress.

Apple Inc rose 1.9 per cent after brokerage UBS upgraded the stock to “buy” on stable long-term demand for iPhones with better authorised service providers.

Walgreens Boots Alliance advanced 3.6 per cent after raising its 2021 profit forecast on higher sales at its US retail pharmacy stores.

On the economic front, US private employers boosted hiring in March as more Americans got vaccinated against covid-19. The payroll report was in line with the recent signs of improvement in the labour market and comes ahead of a more comprehensive monthly jobs report on Friday.

With Reuters

is content editor for Morningstar Australia

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