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Global Market Report - 27 September

Lex Hall  |  27 Sep 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher despite falls on Wall Street overnight amid uncertainty triggered by the Democrats’ bid to impeach the President.

The SPI200 futures contract was up 25 points, or 0.38 per cent, at 6,687.0 at 8am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Friday.

The Australian share market fell for a third straight day yesterday, underperforming compared to its peers in the region.

The benchmark S&P/ASX200 index finished Thursday down 32.6 points, or 0.49 per cent, to 6,677.6 points, while the broader All Ordinaries was down 29.1 points, or 0.43 per cent, to 6,785.6 points.

The released whistleblower report alleged Trump not only abused his office in attempting to solicit foreign interference in the 2020 US election, but that the White House also tried to "lock down" evidence about that conduct.

The report is seen as central to the Democrats' impeachment inquiry. The impeachment push has added to recent market volatility.

On Wall Street, the Dow Jones Industrial Average finished down 0.30 per cent, the S&P 500 was down 0.24 and the tech-heavy Nasdaq Composite was down 0.58 per cent.

The Aussie dollar is buying 67.49 US cents from 67.52 US cents on Thursday.

Asia

China stocks ended lower on Thursday as mixed signals from Washington and Beijing raised doubts whether the two sides would make any progress in their next round of trade talks.

The blue-chip CSI300 index fell 0.8 per cent, to 3,841.14, while the Shanghai Composite Index shed 0.9 per cent to 2,929.09 points.

Hong Kong stocks closed higher on Thursday as investors cheered signs of progress towards a trade deal between the world’s two largest economies.

The Hang Seng index rose 0.4 per cent, to 26,041.93, while the China Enterprises Index gained 0.4 per cent, to 10,212.27.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.07 per cent, while Japan’s Nikkei index closed up 0.13 per cent.

Europe

European shares saw broad-based gains on Thursday, rallying after encouraging comments from China on trade with the US came as a welcome relief amid growth worries and political turmoil.

The optimism seemed to outweigh concerns about impeachment surrounding US President Donald Trump which pushed Wall Street into the red. London’s blue-chip index jumped 0.8 per cent percent despite heavy falls in some stocks.

The pan-European STOXX 600 index closed up 0.6 per cent, after weak purchasing managers’ surveys, worries about Britain’s exit from the European Union and the impeachment probe into Trump had pressured the index over the last three sessions.

Trade optimism was spurred by Beijing saying it’s in close communication with Washington and preparing to make progress at trade talks in October. This came after Trump’s overnight comment that a Sino-US trade deal could happen sooner than expected.

Although investors are keeping a close watch on US-China trade moves, they are starting to price in the possibility of trade negotiations continuing for a long time, and are nearing the point of growing immune to developments on this front, analysts say.

Healthcare stocks were among the biggest gainers on the day after rating agency Moody’s said drugmakers with a major presence in China would benefit from the country’s growing demand for drugs.

AstraZeneca, Novartis and Roche Holding rose between 0.7 per cent and 1.5 per cent.

Belgian supermarket chain Colruyt jumped 7.6 per cent after a better than expected net income forecast.

Some London-listed stocks saw steep declines after issuing profit warnings. Education company Pearson and tobacco company Imperial Brands both dropped more than 12 per cent, while cruise operator Carnival Corp gave up 7.2 per cent.

Dutch bank ABN Amro was also among the biggest drags on the pan-region index, hit by a money laundering investigation.

North America

US stocks have slipped as the release of a whistleblower report tied to the Democrats' impeachment move against President Donald Trump kept uncertainty high, while trade comments from China's top diplomat helped to limit losses.

The S&P 500 briefly turned higher late in the session after China's state councillor and foreign minister said China was willing to buy more US products.

Wang Yi said the Trump administration had shown goodwill by waiving tariffs on many Chinese products.

Facebook was among the biggest drags on the S&P 500, dropping 1.5 per cent after a person familiar with the matter told Reuters the US Justice Department will open an antitrust investigation into the social media company.

The Dow Jones Industrial Average fell 79.59 points, or 0.3 per cent, to 26,891.12 on Thursday, the S&P 500 lost 7.25 points, or 0.24 per cent, to 2977.62 and the Nasdaq Composite dropped 46.72 points, or 0.58 per cent, to 8030.66.

Investors also digested a Bloomberg report that said the US is unlikely to extend a waiver allowing American firms to supply China's Huawei Technologies.

The S&P energy sector was down 1.3 per cent, while defensive sectors, including utilities, were among the best-performing groups.

Shares of fitness startup Peloton Interactive fell 11.2 per cent in their market debut.

is content editor for Morningstar Australia

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