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Global Market Report - 23 May

Lex Hall  |  23 May 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open lower after a six-day winning streak as trade tensions between the US and China bite.

The SPI200 futures contract was down 11 points, or 0.17 per cent, at 6,503.0 at 8am Sydney time, suggesting an early dip for the benchmark S&P/ASX200 on Thursday.

The Australian share market yesterday posted gains for a sixth consecutive day, setting another 11-year high.

The benchmark S&P/ASX200 index was up 10.6 points, or 0.16 per cent, to 6,510.7 points on Wednesday, while the broader All Ordinaries was up 13.7 points, or 0.21 per cent, to 6,598.1.

It was a negative session for Wall Street overnight, with the Dow Jones Industrial Average finishing down 0.39 per cent, the S&P 500 down 0.28 per cent and the tech-heavy Nasdaq Composite down 0.45 per cent.

The Aussie dollar is buying 68.81 US cents from 68.79 US cents on Wednesday.

Asia

China’s major stock indexes fell on Wednesday, as trade worries intensified following a report that the US could blacklist another Chinese tech firm after banning Huawei Technologies last week.

The blue-chip CSI300 index fell 0.5 per cent, to 3,649.38, while the Shanghai Composite Index also ended down 0.5 per cent at 2,891.70.

Hong Kong stocks edged higher on Wednesday. The Hang Seng index rose 0.2 per cent, to 27,705.94 points, while the China Enterprises Index lost 0.3 per cent, to 10,604.55 points.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.09 per cent, while Japan’s Nikkei index closed up 0.05 per cent.

Europe

European shares edged lower on Wednesday on unease over developments in the U.S.-China trade war and Britain’s uncertain departure from the European Union.

The pan-European STOXX 600 index closed down 0.08 per cent with losses on Italy’s MIB and France’s CAC offset by gains in Britain’s FTSE 100 and Germany’s DAX.

Banks and Brexit-sensitive stocks led losses as some investors switched into safe-haven euro zone bonds as pressure grew on UK Prime Minister Theresa May to resign after lawmakers in her own party rejected her compromise deal on exiting the EU.

A report that the US is considering curbs on Chinese video surveillance firm Hikvision added to investor concerns.

Europe’s banking index fell 1.2 per cent to an over four-month low with Banco Santander, Lloyds and Barclays shedding between 1.1 per cent and 2.7 per cent.

London’s FTSE 100 pared most of its early gains to close 0.07 per cent higher as declines in Brexit-sensitive stocks such as housebuilders and retailers accelerated. The exporter-heavy index had outperformed its peers earlier in the session bolstered by a weak pound.

Homebuilders Taylor Wimpey, Berkeley Group and Persimmon fell sharply, while retailers were led lower by Marks & Spencer after it reported a third straight decline in full-year profit.

Germany’s trade-sensitive DAX closed 0.2 per cent higher, recovering from a 0.7 per cent fall earlier in the day.

Payments company Wirecard’s jumped 5.9 per cent on a partnership deal in India over identity cards.

At the top of the STOXX 600 was online financial trading platform IG Group Holdings, after it unveiled a plan to drive growth even as it forecast a sharp fall in full-year net trading revenue and operating profit.

North America

Wall Street's major indexes have dipped as inflamed trade tensions between the US and China weigh on investor sentiment.

A day after Washington's temporary easing of curbs against Huawei Technology provided respite to US stocks, reports that the White House could impose restrictions on another Chinese technology company rattled US shares anew.

Media reports on Wednesday said the Trump administration was considering sanctions on video surveillance firm Hikvision.

Fears that tit-for-tat tariffs and other retaliatory actions by the US and China will hamper global growth have kept investors on edge, putting the S&P 500 on track to post its first monthly decline since the December sell-off.

The Dow Jones Industrial Average fell 100.72 points on Wednesday, or 0.39 per cent, to 25,776.61, the S&P 500 lost 8.09 points, or 0.28 per cent, to 2856.27 and the Nasdaq Composite dropped 34.88 points, or 0.45 per cent, to 7750.84.

A tumble in shares of Qualcomm and Lowe's Companies helped drag down the benchmark S&P 500 index.

A federal judge ruled that Qualcomm illegally suppressed competition in the market for smartphone chips by threatening to cut off supplies and extracting excessive licensing fees. The chipmaker's shares plunged 10.9 per cent.

Lowe's shares dived 11.8 per cent after the home improvement chain cut its full-year profit forecast.

Another retailer, Nordstrom, also reduced its sales and profit forecasts. Nordstrom shares dropped 9.2 per cent.

However, shares of Target jumped 7.8 per cent, the most among S&P 500 companies, after the retailer's quarterly same-store sales and profit beat estimates.

The release of minutes from the Federal Reserve's latest policy meeting, in which officials agreed that their patient approach to setting monetary policy could remain in place "for some time", had little impact on Wall Street's major indexes.

 

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