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Global Market Report - 13 March

Lex Hall  |  13 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open slightly lower after a mixed lead from Wall Street overnight, which was tempered by tame inflation and Boeing’s share fall.

The SPI200 futures contract was down 9 points, or 0.15 per cent, at 6,164.0 at 8am Sydney time, suggesting a flat start for the benchmark S&P/ASX200 on Wednesday. The ASX closed down slightly yesterday as an early rally couldn't be sustained.

The benchmark S&P/ASX200 index closed down 5.4 points, or 0.09 per cent, to 6,174.8 points on Tuesday, while the broader All Ordinaries was up 2.7 points, or 0.04 per cent, at 6,260.6.

On Wall Street, the Dow Jones Industrial Average was down 0.38 per cent, the S&P 500 was up 0.30 per cent and the tech-heavy Nasdaq Composite was up 0.44 per cent.

Gold gained steadily overnight while oil prices edged slightly higher.

The Aussie dollar is buying 70.81 US cents from 70.69 US cents on Tuesday.

Meanwhile, Australia has joined the list of countries temporarily banning the Boeing 737 MAX following the fatal crash in Ethiopia at the weekend.

Out today: WBC-MI consumer confidence March.

ASIA

Asian markets closed sharply higher with shares in Japan leading the region. The Nikkei 225 surged to a six-day high, up 1.79 per cent.

All of the 33 subindexes on the Tokyo Stock Exchange were in positive territory, led by securities and electric machinery.

Financial giant Ping An Insurance Group Co of China announced on Tuesday its first-ever share buy-back plan worth up to 10 billion yuan ($1.5 billion) after posting a forecast-beating jump in annual profit.

Hong Kong's Hang Seng is up 1.46 per cent and China's Shanghai Composite is up 1.10 per cent.

EUROPE

European shares ended flat on Tuesday after a choppy session during which hopes British Prime Minister Theresa May would win support for her plans for an orderly Brexit in an evening vote in parliament gradually faded.

European bourses trimmed their morning gains and the pan-European index ended the day down 0.04 per cent while the euro zone’s STOXXE rose a mere 0.1 per cent.

Dublin’s ISEQ, which typically falls on fears of a disorderly Brexit, edged up 0.25 per cent with investors still confident a no-deal Brexit will eventually be averted.

Britain’s FTSE 100 rose 0.3 per cent as a retreating pound provided an accounting boost to the big exporters that dominate the index.

The British currency experienced heavy volatility, pushing blue chips in and out of positive territory.

Among individual stocks, French engineering firm Spie jumped 8.6 per cent after reporting stronger-than-expected net income.

Swiss drug retailer Galenica was also among top winners, gaining 6.2 per cent after full-year earnings and dividend beat the market’s expectations.

German carmaker Volkswagen fell 1.8 per cent after reporting a decline in operating margins for its core VW brand and announcing it would introduce almost 70 new electric models by 2028.

Dutch payments firm Adyen dropped 5 per cent after pre-IPO investors sold 2.5 million shares at a 9 per cent discount.

Overall, the fourth-quarter earnings season has been underwhelming. Over the past four months, analysts have cut their earnings growth expectations for 2019 from 9 per cent to just 5 per cent.

NORTH AMERICA

The S&P 500 and Nasdaq rose on Tuesday after tame inflation data underscored the Federal Reserve’s dovish stance on rate hikes, but the Dow ended down as Boeing’s shares sank for a second day after one of its planes crashed in Ethiopia.

The Labor Department said its Consumer Price Index rose last month, in line with estimates, and in the 12 months through February the CPI had the smallest gain since September 2016. US Treasury yields fell following the news.

Boeing Co ended down 6.1 percent and registered its biggest two-day drop since June 2009, as more countries grounded the company’s best-selling 737 MAX planes following Sunday’s crash, the second fatal crash involving the plane in months.

Senators Mitt Romney and Elizabeth Warren also urged the Federal Aviation Administration to temporarily ground the aircraft.

The Dow Jones airlines index dropped 2 per cent, while the S&P industrials index fell 0.9 per cent.

The Dow Jones Industrial Average fell 96.22 points, or 0.38 per cent, to 25,554.66, the S&P 500 gained 8.22 points, or 0.30 per cent, to 2,791.52 and the Nasdaq Composite added 32.97 points, or 0.44 percent, to 7,591.03.

The S&P 500 rose as high as 2,798.32 during the session, just below a key technical level of 2,800. If it breaks above that level, that could signal further gains, some investors say.

The index briefly pared gains in afternoon US trading following news that British politicians crushingly rejected May’s deal to quit the EU.

Apple climbed again on Tuesday, a day after the iPhone maker invited media to a 25 March event where it is expected to launch a TV and video service.

F5 Networks fell 7.7 per cent after the network software maker said it would buy privately held NGINX.

is content editor for Morningstar Australia

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