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Global Market Report - 14 March

Lex Hall  |  14 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher after a positive lead from Wall Street overnight, which included a rise for Boeing despite the US grounding the 737 fleet.

The SPI200 futures contract was up 20 points, or 0.32 per cent, at 6,182.0 at 8am Sydney time, suggesting a bounce for the benchmark S&P/ASX200 on Thursday.

The ASX yesterday closed lower for a fourth straight day, after a vote in the British House of Commons cast the Brexit process into disarray.

The benchmark S&P/ASX200 index was down 13.6 points, or 0.22 per cent, to 6,161.2 points, while the broader All Ordinaries was down 14.6 points, or 0.23 per cent, at 6,246

On Wall Street, the Dow Jones Industrial Average was up 0.58 per cent, the S&P 500 was up 0.69 per cent and the tech-heavy Nasdaq Composite was up 0.69 per cent.

Spot gold increased, reaching a two-week high, amid indications the US central bank would be patient and keep interest rates on hold in the near term.

Meanwhile, US oil futures rallied more than one per cent overnight.

The Aussie dollar is buying 70.92 US cents from 70.60 US cents on Wednesday.

ASIA

Asian markets finished broadly lower today with shares in China leading the region. The Shanghai Composite is down 1.09 per cent while Japan's Nikkei 225 is off 0.99 per cent and Hong Kong's Hang Seng is lower by 0.39 per cent.

Heavyweights Samsung Electronics and Tencent Holdings were among the biggest contributors to losses for the Nikkei Asia300 Index on Wednesday, falling 1.8 per cent and 0.7 per cent, respectively, the Nikkei Asian Review reported.

Ping An Insurance Group added 1.6 per cent following a 20.6 per cent jump in profit for 2018 and an 11 per cent increase in revenue. Its shares rose 3.3 per cent in Shanghai.

Cathay Pacific Airways rose 2.3 per cent after the Hong Kong carrier said that it swung to a net profit in 2018, benefiting from capacity growth and higher airfares.

EUROPE

European shares jumped on Wednesday as investors bet British politicians would vote to reject a disorderly no-deal Brexit, but underwhelming results from Inditex and Adidas kept gains limited.

In France, the CAC 40 rose 0.69 per cent while Germany's DAX is up 0.42 per cent.
The pan-European STOXX 600 index climbed to close up 0.6 per cent while London’s FTSE 100 barely managed a 0.1 per cent gain as sterling extended gains.

Politicians resoundingly voted against Prime Minister Theresa May’s amended Brexit deal late on Tuesday, forcing parliament to decide whether to back a no-deal Brexit or seek a last-minute delay to the process.

European stocks were boosted by a 1 per cent jump in oil prices which drove the STOXX 600 oil & gas index up 1.6 per cent to its highest level in four months.

Results from several companies disappointed, however.

Germany’s Adidas lost 2.4 per cent after announcing supply chain issues would hit its sales growth in the first half of 2019, particularly in North America.

Wirecard was Europe’s worst performer, falling 6.6 per cent after it suspended an accounting employee in Singapore amid allegations of fraud and creative accounting.

Shares in Norwegian Air dipped 1.5 per cent after it said it would seek compensation from plane maker Boeing for lost revenue and extra costs after grounding its fleet of 737 MAX 8 aircraft in the wake of the Ethiopian Airlines crash.

NORTH AMERICA

US stocks rose on Wednesday, led by gains in healthcare shares, and Boeing edged upward even as the US joined other nations in grounding the company’s 737 MAX jets.

Boeing Co shares ended up 0.5 per cent at $377.14, recovering from a more than 3 per cent fall in the afternoon, when the US announced it was grounding Boeing’s 737 MAX jets following Sunday’s fatal crash in Ethiopia.

The US Federal Aviation Administration cited new satellite data and evidence from the scene of Sunday’s crash, the second disaster involving the 737 MAX in less than five months.

The grounding gives Boeing time to address any problems and not face another potential disaster, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Boeing shares are still down about 11 per cent since Friday’s close. The world’s largest planemaker had been the best-performing Dow component this year.

Also helping stocks Wednesday, fresh economic data strengthened the Federal Reserve’s patient stance on future interest rate hikes.

Producer prices barely rose in February, resulting in the smallest annual increase in more than 18 months, yet another indication of benign inflation.

CVS Health Corp rose 3.5 per cent after Bernstein started coverage of the pharmacy benefit manager with an "outperform" rating. The S&P 500 healthcare index rose 1.1 per cent. UnitedHealth Group shares rose 2.6 per cent.

The Dow Jones Industrial Average rose 148.23 points, or 0.58 per cent, to 25,702.89, the S&P 500 gained 19.4 points, or 0.69 per cent, to 2,810.92 and the Nasdaq Composite added 52.37 points, or 0.69 per cent, to 7,643.41.

Energy shares rose as oil prices rallied about 2 per cent. The S&P 500 energy index finished up 1.09 per cent.

Adding to the upbeat mood was a vote in which British politicians rejected leaving the European Union without a deal in any scenario.

Fuelling some volatility in afternoon trading, US President Donald Trump said he was in no rush to complete a trade deal with China and insisted that any deal include how it treats US intellectual property.

is content editor for Morningstar Australia

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