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Global Market Report - 22 March

Lex Hall  |  22 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher today as a tech-led rally put Wall St firmly in the black overnight.

The SPI200 futures contract was up 42 points, or 0.68 per cent, at 6,197.0 at 8am Sydney time, suggesting an early jump for the benchmark S&P/ASX200 on Friday.

Australian shares closed up a whisker yesterday following a late afternoon rally after spending most of the day in the red during a busy day for economic indicators.

The benchmark S&P/ASX200 index bounced up 28 points in the final 40 minutes of trade to close up 1.9 points, or 0.03 per cent, to 6,167.2 points. The broader All Ordinaries was up 1.7 points, or 0.03 per cent, at 6,253.5.

On Wall Street overnight, the Dow Jones Industrial Average was up 0.84 per cent, the S&P 500 was up 1.09 per cent and the tech-heavy Nasdaq Composite was up 1.42 per cent.

The Aussie dollar is buying 71.12 US cents from 71.46 US cents on Thursday.

ASIA

Shanghai stocks edged higher on Thursday, after the US Federal Reserve took a more accommodative stance at its policy meeting.

The blue-chip CSI300 index was unchanged at 3,836.89 points, while the Shanghai Composite Index closed up 0.3 per cent at 3,101.46 points.

Hong Kong stocks ended lower on Thursday, pressured by tech firms, as concerns about US-China trade talks lingered.

The Hang Seng index fell 0.9 per cent to 29,071.56, while the China Enterprises Index lost 0.7 per cent to 11,544.09.

The Hang Seng telecommunication index slumped 3.2 per cent, posting its worst day in a year. The IT index closed down 1.8 per cent, as market eyed gaming giant Tencent’s quarterly results.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.4 per cent.

EUROPE

European stock markets slipped for a second day on Thursday, weighed down by financial stocks and a sharp drop in French-Italian glasses company EssilorLuxottica.

Frankfurt, Madrid, Dublin and Paris all racked up losses, but in London, a surge in energy shares and a weaker pound drove the FTSE 100 up 0.9 per cent to a more than five-month high.

The pan-European STOXX 600 index ended just 0.04 per cent lower, with banks weaker after Wednesday’s shift in US central bank policy and a warning from Switzerland’s UBS about investment banking revenues.

Tensions between the French and Italian factions at the top of EssilorLuxottica knocked its shares, while chemicals group Bayer slid further after a second US court ruling against Roundup weedkiller.

Sterling was on course for its worst day so far this year.

NORTH AMERICA

An Apple-led tech rally has pushed Wall Street higher as jitters over the Federal Reserve's forecast of an economic slowdown were calmed by upbeat economic data.

All three major US stock indexes ended the session in the black, with the Nasdaq showing its fifth straight advance, the Dow posting its best day in over a month and the benchmark S&P 500 closing less than three per cent below its all-time high set in September.

On Wednesday, the Fed surprised investors with a policy statement that was more dovish than expected, as it anticipated no further interest rate hikes this year due to signs of softness in the US economy.

But worries about the central bank's signals on the economy were mollified by upbeat data on Thursday. In separate reports, initial claims for jobless benefits fell more than expected and mid-Atlantic factory activity rebounded sharply.

Apple led the tech sector's advance, rising 3.7 per cent ahead of the company's expected streaming service debut next week.

Chipmakers also gave technology stocks a lift after Micron Technology predicted a recovery in the memory market as it reported better-than-expected quarterly earnings. Micron's stock jumped 9.8 per cent.

The Philadelphia SE Semiconductor Index rose 3.5 per cent, its biggest percentage gain since late January. The index has surged by nearly 25 per cent so far this year.

The Dow Jones Industrial Average rose 216.84 points, or 0.84 per cent, to 25,962.51, the S&P 500 gained 30.65 points, or 1.09 per cent, to 2,854.88 and the Nasdaq Composite added 109.99 points, or 1.42 per cent, to 7,838.96.

Of the 11 major sectors in the S&P 500, all but financials ended the session in positive territory.

Rate-sensitive banks came under pressure as the Fed's decision to cease monetary tightening caused the US Treasuries yield curve to flatten to its narrowest spread since August 2007.

is content editor for Morningstar Australia

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