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Global Market Report - 12 November

Emma Rapaport  |  12 Nov 2020Text size  Decrease  Increase  |  
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Australia

Australian shares are set to rise at the open, as tech shares bounced in New York, and there remained positive overall sentiment from Pfizer's vaccine news earlier this week.

The Australian SPI 200 futures contract was up 14 points, or 0.2 per cent, to 6,453 points at 7:10am Sydney time on Thursday, suggesting a positive start to trading.

The Nasdaq closed higher on Wednesday as investors switched back to technology stocks and away from economically sensitive sectors as they weighed covid-19 vaccine progress against a virus surge and likely timing for an economic rebound.

Unofficially, the Dow Jones Industrial Average fell 6.18 points, or 0.02 per cent, to 29,414.74, the S&P 500 gained 26.8 points, or 0.76 per cent, to 3,572.33 and the Nasdaq Composite added 227.52 points, or 1.97 per cent, to 11,781.37.

Locally, the Australia's share market closed at its highest level since February after another buying frenzy, based on belief a coronavirus vaccine is on its way.

The S&P/ASX200 benchmark index closed up 109.2 points, or 1.72 per cent, to 6,449.7 on Wednesday.

All industry sectors finished higher. Energy, which has plunged during the pandemic, continued a recent revival and gained 5.05 per cent.

Gold was down 0.63 per cent at $US1,864.68 an ounce; Brent oil was up 2.85 per cent per cent to $US43.61 a barrel; Iron ore was up 1.47 per cent at $US122.61 a tonne.

Meanwhile, the Australian dollar was buying 72.79 US cents at 8.00am, down from 72.8 US cents on Thursday’s open.

Asia

China stocks closed lower on Wednesday, dragged down by losses in electric vehicle and healthcare shares on profit-taking, while concerns about tighter regulation over big tech companies also weighed on sentiment.

At the close, the Shanghai Composite index was down 0.53 per cent at 3,342.20. The blue-chip CSI300 index was down 0.99 per cent, with its new energy vehicle sector sub-index down 3.56 per cent, tech sub-index lower by 3.1 per cent and the healthcare sub-index down 2.45 per cent. The real estate index was up 1.38 per cent and the bank sector sub-index added 0.7 per cent.

The smaller Shenzhen index ended down 1.93 per cent and the start-up board ChiNext Composite index was weaker by 3.306 per cent.

Hong Kong shares closed lower on Wednesday, dragged by tech shares on concerns about tighter regulations over big tech giants such as Alibaba Group.

At the close of trade, the Hang Seng index was down 74.50 points, or 0.28 per cent, at 26,226.98. The Hang Seng China Enterprises index fell 0.43 per cent to 10,541.34.
Hong Kong-listed tech giants fell after China published draft rules aimed at preventing monopolistic behaviour by internet platforms. The concerns offset optimism about consumption rebound from the covid-19 pandemic as Alibaba recorded billions in sales during its Singles’ Day mega-shopping festival. The biggest loser on the Hang Seng was Alibaba, which fell 9.8 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.64 per cent, while Japan’s Nikkei index closed up 1.78 per cent. At 0705 GMT, the yuan was quoted at 6.5993 per US dollar, 0.25 per cent firmer than the previous close of 6.616.

Europe

European shares rose for a third straight day on Wednesday as optimism around a potential covid-19 vaccine and encouraging comments from European Central Bank chief Christine Lagarde offset worries of economic damage from surging infections.

The pan-European STOXX 600 jumped 1 per cent, building on a 6 per cent rally this week as investors bought into utilities as well as travel-related stocks, a sector that has widely underperformed this year.

Technology stocks, which have tracked a surge in their US counterparts since the coronavirus-driven crash in March, gained 2 oer cent.

The benchmark STOXX 600 has surged nearly 45 per cent since March, thanks partly to historic global stimulus, but it is still down 6.5 per cent on the year as the resurgence in covid-19 cases threatens a nascent economic recovery.

Spain, which has been among the countries hit hardest by the health crisis, will get its first vaccines in early 2021, while Italy expects to receive an initial 3.4 million shots in January.
Among country indexes, German stocks rose 0.4 per cent, while London's FTSE 100 and France's CAC 40 added 1.4 per cent and 0.5 per cent, respectively.

North America

The Nasdaq closed higher on Wednesday as investors switched back to technology stocks and away from economically sensitive sectors as they weighed covid-19 vaccine progress against a virus surge and likely timing for an economic rebound.

After falling sharply for two days, the tech-heavy Nasdaq was boosted by "stay-at-home" stocks such as Microsoft, Amazon.com Inc, Apple Inc and Netflix Inc, which advanced in Wednesday's session.

Monday's encouraging late-stage coronavirus vaccine trial data had prompted a two-day rotation away from technology stocks into sectors that typically outperform coming out of a recession such as industrials, materials and energy.

But investors changed gears Wednesday to buy the S&P growth index, which includes the less economically sensitive technology stocks, and sell the value index, which includes banks and energy stocks.

The Democratic Party retained control of the US House of Representatives with a lower majority, the Associated Press reported. As a result investors are now focused on whether they can wrestle Senate control from Republicans, which will not be decided until special elections in January.

Unofficially, the Dow Jones Industrial Average fell 6.18 points, or 0.02 per cent, to 29,414.74, the S&P 500 gained 26.8 points, or 0.76 per cent, to 3,572.33 and the Nasdaq Composite added 227.52 points, or 1.97 per cent, to 11,781.37.

is an editor for Morningstar.com.au

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