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Global Market Report - 15 March

Lex Hall  |  15 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher after Wall Street traded on a flat note overnight amid investor jitters about US-China trade uncertainty.

The SPI200 futures contract was up 16 points, or 0.26 per cent, at 6,203.0 at 8am Sydney time, suggesting a small bounce for the benchmark S&P/ASX200 on Friday. The ASX200 yesterday closed higher for the first time in five days, driven by the energy and tech sectors.

The benchmark S&P/ASX200 index closed up 18.4 points, or 0.3 per cent, to 6179.6 points on Thursday, while the broader All Ordinaries was down 20.8 points, or 0.33 per cent, at 6266.8.

On Wall Street, the Dow Jones Industrial Average was up 0.03 per cent, the S&P 500 was down 0.09 per cent and the tech-heavy Nasdaq Composite was down 0.16 per cent.

The price of iron ore increased while gold fell more than one per cent overnight.

Oil prices were mixed, with US West Texas Intermediate crude oil futures up 35 US cents to $US58.61 per barrel while Brent crude futures fell 32 US cents to $US67.23 per barrel.

The Aussie dollar is buying 70.64 US cents from 70.62 US cents on Thursday.

ASIA

Hong Kong stocks edged higher on Thursday after China reported stronger-than-expected investment in its slowing economy, but a weaker industrial output growth limited the gains.

The Hang Seng index ended 0.2 per cent higher at 28,851.39 points.

The Hang Seng China Enterprises index rose 0.4 per cent.

The sub-index of the Hang Seng tracking energy shares rose 1.7 per cent, while the IT sector dipped 0.8 per cent, the financial sector ended 0.1 per cent higher and the property sector lost 0.3 per cent.

China’s industrial output rose 5.3 per cent in the first two months of the year, the National Bureau of Statistics said, less than expected and the slowest pace since early 2002.

However, investment picked up speed as the government fast-tracked more road and rail projects, and more monetary policy support is expected this year.

US President Donald Trump said on Wednesday he was in no rush to complete a trade pact with China, including protection for intellectual property, a major sticking point between the two sides during months of negotiations.

China’s main Shanghai Composite index closed down 1.2 per cent at 2990.69 points, while the blue-chip CSI300 index ended down 0.7 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.1 per cent, while Japan’s Nikkei index closed pretty much flat.

The top gainer on the Hang Seng was CNOOC, which gained 3.8 per cent, while the biggest loser was Sunny Optical Technology Group Co, which fell 3.3 per cent.

EUROPE

European shares rose to a five-month high on Thursday, boosted by strength in the banking sector after Britain’s parliament voted to reject a disorderly Brexit.

Sentiment improved from cautious to upbeat after the open, ahead of another vote on Thursday evening that could delay Britain’s planned departure from the European Union.

The pan-European STOXX 600 ended up 0.7 per cent, while British blue chips rose 0.5 per cent.

Leonardo scored its best day in more than 7 years, up 13 per cent, recouping some of its steep losses since January 2018, after the Italian defence group said net profit surged and it saw sales rising in 2019.

Germany’s GEA rose 11 per cent after its CEO said it will announce changes to its structure in June, while France’s Lagardere gained 8 per cent after giving more details about its divestment plans.

Among the fallers, Lufthansa posted the worst performance after reporting an 11 per cent decline in fourth-quarter operating profits. Its shares fell 6.3 per cent.

Italy’s top insurer, Assicurazioni Generali, rose 1.2 per cent as it raised its dividend for 2018 after beating its business plan targets.

Banks rose 0.9 per cent.

NORTH AMERICA

The S&P 500 has slipped, snapping a three-day streak of gains, as uncertainty over when a trade deal between the US and China would be reached left investors on edge.

US President Donald Trump and Treasury Secretary Steven Mnuchin's discussions with China to end a months-long trade war are progressing quickly, though Trump said he could not say whether a final deal would be reached.

He and Chinese President Xi Jinping had been expected to hold a summit in Florida this month, but no date has been set.

Bloomberg reported on Thursday that a meeting between the two was more likely to take place in April at the earliest.

Chipmakers, which rely on China for a large portion of their revenue also lost ground with the Philadelphia SE chip index off 0.6 per cent.

In the latest of a series of votes, British MPs voted overwhelmingly on Thursday to seek a delay in Britain's exit from the European Union.

The Dow Jones Industrial Average rose 7.05 points, or 0.03 per cent, to 25,709.94, the S&P 500 lost 2.44 points, or 0.09 per cent, to 2,808.48 and the Nasdaq Composite dropped 12.50 points, or 0.16 per cent, to 7,630.91.

Boeing, the single largest US exporter to China, slipped 1.0 per cent.

The world's largest planemaker had its own troubles this week after its money-spinning 737 MAX jets were grounded globally following a recent fatal crash in Ethiopia.

Facebook shares fell 1.8 per cent after the world's largest social network suffered a major outage that frustrated users across the globe for about 24 hours. It said it had restored the service to its main app and Instagram.

After the bell, Facebook's stock was down 1.9 per cent as chief executive officer Mark Zuckerberg said in a blog post that Chief Product Officer Chris Cox will leave the social media network.

Among the day's advancers, General Electric shares rose 2.8 per cent after chief executive Larry Culp set conservative profit targets for this year and vowed for a better 2020 and beyond.

Apple rose 1.1 per cent, extending recent gains, after brokerage Cowen and Co started coverage with an "outperform" rating. An Apple-led technology rally has propped markets recently.

On the economic front, a Commerce Department report showed sales of new US single-family homes fell more than expected in January, suggesting the housing market weakness persisted early in the first quarter.

The downbeat housing data followed tame inflation reports this week which underscored the US Federal Reserve's patient stance on future interest rate hikes.

is content editor for Morningstar Australia

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