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Global Market Report - 26 November

Lex Hall  |  26 Nov 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher following gains on Wall Street overnight while locally Westpac chief Brian Hartzer has announced he’ll quit next week.

The SPI200 futures contract was up 27.0 points, or 0.40 per cent, at 6,769.0 at 8am Sydney time, suggesting a rise for the benchmark S&P/ASX200 on Tuesday.

The Australian share market has moved higher after signs that China is willing to raise penalties on intellectual property theft, a key sticking point in its trade war with the US.

The benchmark S&P/ASX200 index surged in the first hour of trade yesterday but then mostly dropped the rest of the day, giving up about half its gains to finish on Monday up 21.6 points, or 0.32 per cent, to 6,731.4 points.

On Wall Street, the Dow Jones Industrial Average was up 0.68 per cent, the S&P 500 was up 0.75 per cent and the tech-heavy Nasdaq Composite was up 1.32 per cent.

Locally, Westpac Banking Corp on Tuesday said chief executive Brian Hartzer would be stepping down, as Australia’s second-biggest bank faces the country’s biggest money-laundering scandal. 

Chief financial officer Peter King will be taking over as acting CEO, effective 2 December. Longstanding chairman Lindsay Maxsted will bring forward his retirement to early 2020.

The Aussie dollar is buying 67.77 US cents from 67.96 US cents on Monday.

Asia

China stocks started the week higher on Monday, underpinned by fresh hopes for progress in Sino-US trade talks following positive comments from both sides.

The blue-chip CSI300 index rose 0.7 per cent, to 3,878.21, while the Shanghai Composite Index also closed up 0.7 per cent at 2,906.17.

Hong Kong stocks closed higher on Monday as investors cheered signs of headway in the trade negotiations between Washington and China, following upbeat comments from both countries.

The Hang Seng index ended 1.5 per cent firmer at 26,993.04, while the China Enterprises Index closed up 1.2 per cent at 10,628.88.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.66 per cent, while Japan’s Nikkei index closed up 0.78 per cent.

Europe

European shares posted their best day in six weeks on Monday, as transatlantic deals by Louis Vuitton owner LVMH and Swiss drugmaker Novartis, as well as hopes that the United States and China would seal a trade deal, boosted sentiment.

Shares of LVMH rose 2 per cent as the French firm agreed to buy US jeweller Tiffany for $16.2 billion in its biggest acquisition yet.

Tiffany’s lower-priced rival, Denmark’s Pandora, gained 1 per cent, while other luxury goods makers such as Gucci parent Kering, Italian jacket maker Moncler and London’s Burberry gained between 0.4 per cent and 2.7 per cent.

Novartis shares were a big boost to the STOXX 600 index on the back of the drugmaker’s $9.7 billion takeover of The Medicines Co, which seeks to expand its portfolio of medicines treating cardiovascular diseases.

Travel and leisure and healthcare led gains across European sub-sectors, which were all in positive territory.

The pan-European STOXX 600 closed 1 per cent higher at a four-year peak, as major stock indexes in the US hit record highs.

The benchmark index bounced back from last week’s marginal loss, which had broken a run of six straight weeks of gains, fuelled largely by hopes of a trade deal.

A report that said China and the US were very close to a “phase one” deal added to optimism from Friday, when leaders of both nations had expressed their interest in a deal.

China also said on Sunday it would seek to improve protections for intellectual property rights, a major demand of the US in trade negotiations.

Among other stocks, Prysmian gained about 5 per cent after the cable maker’s troubled Western Link high voltage connection was taken over by clients, reducing further the near-term risk for the company.

Spain-based wind turbine maker Siemens Gamesa jumped more than 8 per cent after Bloomberg reported that Germany’s Siemens was considering buying Iberdrola’s 8 per cent stake in the company.

In economic data, the Ifo economic institute said business morale in Germany improved in November, but indicated that manufacturing in Europe’s powerhouse was still stuck in a recession.

North America

Each of Wall Street’s three major averages kicked off the trading week by closing at records on Monday as signs pointed to progress between the US and China on a trade truce, while a round of merger deals also helped buoy sentiment.

A Chinese state-backed tabloid said Beijing and Washington were “very close” to an initial pact, which lifted trade-sensitive semiconductor stocks, including Applied Materials Inc, up 4.18 per cent and Lam Research Corp, which gained 2.68 per cent. The Philadelphia Semiconductor index jumped 2.43 per cent and was on pace for its best day in just over three weeks.

Nvidia Corp rose 4.89 per cent and paced the gains on the chip index as Morgan Stanley upgraded its shares to “overweight” from “equal weight”.

The report came on the heels of comments over the weekend by a top US official that an agreement was still possible by the end of the year, dampening worries the negotiations could spill over into 2020.

The Dow Jones Industrial Average rose 189.77 points, or 0.68 per cent, to 28,065.39, the S&P 500 gained 23.29 points, or 0.75 per cent, to 3,133.58 and the Nasdaq Composite added 112.60 points, or 1.32 per cent, to 8,632.49.

Apple Inc rose 1.75 per cent as the top boost to the S&P and Nasdaq and the second-biggest lift to the price-weighted Dow Jones Industrial Average.

Gains on Monday were broad with only the defensive consumer staples and utilities S&P sectors in the red. Tech gains helped push the Nasdaq up by more than 1 per cent, with the group on pace for its best day since 1 November.

Tiffany & Co jumped 6.20 per cent and was the biggest gainer on the S&P 500 as the luxury jeweller agreed to a sweetened $16.2 billion deal to be acquired by France’s LVMH.

US discount brokerage TD Ameritrade Holding Corp was up 7.58 per cent after larger rival Charles Schwab Corp said it would buy the company in an all-stock deal valued at about $26 billion. Schwab rose 2.30 per cent.

EBay Inc gained 2.08 per cent after the e-commerce major said it would sell ticketing unit StubHub to ticket reseller Viagogo for $4.05 billion in cash.

Major averages on Wall Street have reached a series of new highs recently on hopes for progress of a trade deal and third-quarter corporate earnings came in better than lowered expectations. Monday marked the fourth closing record for the Dow, S&P 500 and Nasdaq in the past seven sessions.

Failing to participate in the advance, Uber Technologies slipped 1.52 per cent as the ride-hailing company was stripped of its licence to carry paying passengers in London for the second time in just over two years.

 

is content editor for Morningstar Australia

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