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Global Market Report - 25 November

Lex Hall  |  25 Nov 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher after a positive lead from overseas at the end of last week.

The SPI200 futures contract was up 12.0 points, or 0.18 per cent, at 6,732.0 at 8am Sydney time, suggesting a rise for the benchmark S&P/ASX200 on Monday.

On Friday, the Australian share market closed higher for the first time since Tuesday, despite Westpac dragging the financial sector down.

The benchmark S&P/ASX200 index finished Friday up 36.9 points, or 0.55 per cent, to 6,709.8 points, while the broader All Ordinaries was up 38.8 points, or 0.57 per cent, to 6,816.5 points.

On Wall Street on Friday, the Dow Jones Industrial Average closed up 0.39 per cent, the S&P 500 was up 0.22 per cent and the tech-heavy Nasdaq Composite was up 0.16 per cent.

The Aussie dollar is buying 67.94 US cents from 67.87 US cents on Friday.

Asia

China stocks posted their lowest close in almost three months on Friday amid concerns over deteriorating relations between Beijing and Washington after two US warships sailed near islands claimed by China and as the US backed Hong Kong protesters.

The Shanghai Composite index hit its lowest level since Aug. 26 in intraday trade before settling down 0.6 per cent at 2,885.29. It fell 0.2 per cent this week.

The blue-chip CSI300 index shed 1 per cent, losing 0.7 per cent for the week.

Hong Kong stocks rebounded on Friday, in line with broader Asian peers, on renewed hopes of Washington and Beijing striking a preliminary trade deal and as the Asian financial hub took a breather from political unrest ahead of key elections.

At the close of trade, the Hang Seng index was up 0.5 per cent at 26,595.08, and posted a weekly gain of 1 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.1 per cent, while Japan’s Nikkei index closed up 0.3 per cent.

Europe

European shares logged their best day in three weeks on Friday, as upbeat data out of major eurozone economies, as well as positive rhetoric on a US-China trade deal, ended a dour week on a positive note.

The trade sensitive European miners jumped nearly 2 per cent, erasing nearly all losses from earlier this week. All but one of the European sub-sectors ended higher.

US President Donald Trump said a trade deal with China is “potentially very close”. Beijing had said earlier it wanted to work out an initial agreement with Washington, following reports that a truce could be delayed to 2020.

The pan-European STOXX 600 index ended 0.4 per cent higher but still snapped a six-week winning streak as recent mixed signals on trade clouded the sentiment.

Earlier in the day, separate surveys showed business activity picked up slightly in France this month while German business conditions continued to deteriorate in November, although more slowly than recently.

Reports from both economies, came as a relief to investors even as another survey showed European PMI slipped in November, narrowly missing a contraction.

However, in Britain, a survey showed business this month suffered its deepest downturn since mid-2016 as the approach of a national election exacerbated uncertainty about Brexit, causing a sharp fall in the pound.

Sterling's losses helped London's exporter-heavy FTSE post its best day in nearly four months.

Among stocks, Italian broadcaster Mediaset rose more than 2 per cent after sources told Reuters that French media group Vivendi is prepared to sell part of its stake in the firm at a loss in an attempt to reach a deal to end years of bitter legal disputes.

French pre-paid meal vouchers and card provider Edenred dropped 2.4 per cent after announcing a cyber-attack on its information technology system.

Umicore slid nearly 4 per cent as Bank of America Merrill downgraded the Belgian materials and technology group to “neutral”

North America

Wall Street has closed higher after both Washington and Beijing made positive comments on the potential for a trade deal between the world's two biggest economies and upbeat domestic economic data helped to ease investor worries.

US President Donald Trump told Fox News a trade deal was "potentially very close" following remarks by President Xi Jinping that Beijing wanted to work out an initial agreement.

The S&P 500 and the Dow showed their biggest daily gains in a lacklustre week marked by uncertainty, with a report suggesting the delay of a trade truce to 2020 and US lawmakers passing two bills supporting protesters in Hong Kong, which could complicate US-China talks.

Strategists said it helped that Trump was vague on Friday about whether he would sign or veto the bills.

Manufacturing output accelerated in November to its fastest pace in seven months and services activity picked up more than expected.

The Dow Jones Industrial Average rose 109.33 points, or 0.39 per cent, to 27,875.62, the S&P 500 gained 6.75 points, or 0.22 per cent, to 3,110.29 and the Nasdaq Composite added 13.67 points, or 0.16 per cent, to 8,519.89.

Still, the S&P snapped its six-week winning streak, while the tech-heavy Nasdaq registered its first weekly drop in eight weeks and the Dow showed a weekly loss after four weeks of gains. A largely better-than-expected third-quarter corporate earnings season contributed to recent rallies.

Seven of the 11 major S&P 500 sectors closed higher, led by a 0.76 per cent gain in financials and a 0.65 per cent rise in consumer discretionary.

Nordstrom Inc rose 10.6 per cent after the retailer raised its 2019 forecast and reported third-quarter profit above expectations. Gap Inc shares rose 4.4 per cent as the retailer beat lowered quarterly profit estimates days after it cut its annual forecast and replaced its longtime chief executive officer.

Shares of Tesla Inc fell 6 per cent as Wall Street questioned the look of its newly unveiled electric pickup truck, whose "armoured glass" windows shattered in a demonstration.

Intuit Inc dropped 4.2 per cent after the income-tax filing software maker forecast second-quarter profit below estimates.

is content editor for Morningstar Australia

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