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Global Market Report - 12 March

Lex Hall  |  12 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to advance on Tuesday, following a jump in tech shares in the US and global optimism around China's stimulus to shore up its slowing economy.

Energy stocks could gain on stronger oil prices on Monday, inspired by comments from the Saudi Energy Minister that an end to OPEC-led supply cuts was unlikely before June.

The SPI200 futures contract was up 38 points, or 0.61 per cent, at 6,224.0 at 8am Sydney time, suggesting a bounce for the benchmark S&P/ASX200 on Tuesday.

The ASX started the week on a down note, yesterday, with energy investors appeared spooked by news the world's largest wealth fund plan to sell its stakes in oil and gas companies.

The benchmark S&P/ASX200 index closed down 23.6 points, or 0.38 per cent, to 6,180.2 points at 4.15pmp on Monday, while the broader All Ordinaries closed down 23.8 points, or 0.38 per cent, at 6,263.3.

On Wall Street, the Dow Jones Industrial Average was up 0.79 per cent, the S&P 500 was up 1.47 per cent and the tech-heavy Nasdaq Composite was up 2.02 per cent.

The Aussie dollar is buying 70.70 US cents from 70.42 US cents on Monday.

Out today: NAB business survey - conditions and confidence February; Housing finance for January; RBA's Guy Debelle speech.

ASIA

Asian markets finished broadly higher yesterday with shares in China leading the region.

The Shanghai Composite is up 1.92 per cent while Hong Kong's Hang Seng is up 0.97 per cent China's stocks recovered from the biggest plunge in five months amid cautious optimism that China and the US can forge a compromise on trade, and as Chinese officials boosted investor hopes of policy support for a slowing economy.

Japan's Nikkei 225 is up 0.47 per cent.

EUROPE

European markets finished higher yesterday with shares in Germany leading the region.

The DAX is up 0.75 per cent while France's CAC 40 is up 0.66 per cent and London's FTSE 100 is up 0.37 per cent.

Challenger banks OneSavings and Charter Court Financial Services both surged about 11 per cent, topping the mid-cap index, after confirming merger talks which analysts at Investec described as "a marriage made in heaven".

The rise marked OneSavings' biggest one-day gain since August 2016 and Charter Court Financial enjoyed its best-ever day.

London-listed shares of Ryanair were down 2.1 per cent. The low-cost carrier said its board had passed resolutions to protect its EU airline licences after Brexit. But traders cited concerns about possible disruptions from Brexit even despite the contingency plans.

NORTH AMERICA

US stocks jumped on Monday as the technology sector led a broad-based rebound following five straight sessions of losses, but a fall in Boeing’s shares limited the Dow’s advance after a deadly airline crash in Ethiopia.

Boeing Co, the world’s largest planemaker and best-performing Dow component this year by a wide margin, ended down 5.3 per cent at $400.01, registering its biggest one-day percentage drop since 29 October, after many airlines grounded the company’s new 737 MAX 8 passenger jet following the second fatal crash involving the aircraft in just five months.

The stock had its highest daily trading volume since July 2013 and ended well off its session low of $365.55, but it kept a lid on the Dow, which managed only about half the gains of the S&P 500.

All the major S&P sectors rose, led by gains in the technology sector, which was up 2.2 per cent. The industrial sector reversed early losses to end up 0.9 per cent.

The Dow Jones Industrial Average rose 200.64 points, or 0.79 per cent, to 25,650.88, the S&P 500 gained 40.23 points, or 1.47 per cent, to 2,783.3 and the Nasdaq Composite added 149.92 points, or 2.02 per cent, to 7,558.06.

The S&P 500 last week registered its biggest decline since the end of 2018 after tepid job and other economic data, but the index is up about 11 per cent for the year so far.

Apple rose 3.5 per cent after Bank of America Merrill Lynch upgraded the iPhone maker’s shares to “buy.” Also, Apple invited media to a 25 March event at the Steve Jobs Theatre on its campus in Cupertino, California.

Sources previously told Reuters that Apple is targeting April for the launch of a streaming television service that will likely include subscription TV service.

Chipmaker Nvidia jumped after entering a $6.8 billion deal to buy Mellanox Technologies. The Israeli chip designer also rose.

In Washington, President Donald Trump told Congress to slash funding for foreign aid and the State Department and increase spending for the military and the wall he wants to build on the US-Mexico border in his 2020 budget, the opening move in his next funding fight with Congress.

Defence companies General Dynamics, United Technologies Corp and Textron rose on the news.

is content editor for Morningstar Australia

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