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Global Market Report - 28 November

Lex Hall  |  28 Nov 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher after gains on Wall Street as fresh data points to an economy on solid footing.

The SPI200 futures contract was up 18.0 points, or 0.26 per cent, at 6,877.0 at 7am Sydney time, suggesting a rise for the benchmark S&P/ASX200 on Thursday.

The Australian share market closed higher for a fourth day yesterday, rallying to eclipse its all-time closing high set on July 30.

The benchmark S&P/ASX200 index finished Wednesday up 63.1 points, or 0.93 per cent, to 6850.6 points, while the broader All Ordinaries was up 60.8 points, or 0.88 per cent, to 6,950.6 points.

On Wall Street, the Dow Jones Industrial Average was up 0.15 per cent, the S&P 500 was up 0.42 per cent and the tech-heavy Nasdaq Composite was up 0.66 per cent.

The Aussie dollar is buying 67.78 US cents from 67.77 US cents on Wednesday.

Asia

China shares fell on Wednesday as weak industrial profit data highlighted growing strains on the economy, outweighing US President Donald Trump’s remark that an initial trade deal with Beijing was near.

At the close, the Shanghai Composite index fell 0.1 per cent to 2,903.19 and the blue-chip CSI300 index was down 0.4 per cent, while most other Asian markets gained on hopes of a deal.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.4 per cent, while Japan’s Nikkei index closed up 0.3 per cent.

Shares in Hong Kong ticked up on Wednesday as US President Donald Trump raised hopes of sealing an interim trade deal with Beijing, though disappointing industrial profits in China limited gains.

At close of trade, the Hang Seng index climbed 0.2 per cent to 26,954. The Hang Seng China Enterprises index was pretty much flat.

Europe

European stocks rose for the fourth session on Thursday, as telecom stocks rose after a report that Deutsche Telekom is examining a possible merger with France’s Orange, while hopes for an end to the US-China trade dispute also helped the mood.

Deutsche Telekom gained 1.3 per cent after the German business daily Handelsblatt report. Orange shares were little changed as it said “there are no ideas or discussions going on”.

Telecoms were the top performing European sub-sector with their more than 1 per cent rise.

The pan-European STOXX 600 index finished 0.3 per cent higher at a new 4-four peak as comments from US President Donald Trump on Tuesday that Washington was in the “final throes” of work on a deal continued to buoy the sentiment.

US stock indexes also hit record highs on Wednesday.

Trade optimism has helped the benchmark index rise about 1.5 per cent in a relatively uneventful week with a US Thanksgiving holiday on Thursday. Volumes on the STOXX 600 index were well below long-term daily averages on Wednesday.

The benchmark European index is expected to hit a record high by the end of next year, a Reuters poll showed, underpinned by loose monetary policy and hopes of an orderly Brexit.

Among major country indexes, Germany's trade-reliant was leading the charge with its 0.4 per cent rise, shrugging off weak data out of China earlier in the day. Italy's slipped after two days of gains and France's CAC 40 was marginally lower.

The biggest boost to benchmark index were shares of British American Tobacco, up 3 per cent after it raised its full-year revenue forecast, even as it said a slowdown in the US vaping market would lead to lower revenue growth in its vaping arm.

Sweden’s SEB gained more than 3 per cent as said it saw no need for further action after a television report said accounts at the bank had links to suspected money laundering in Estonia.

Engineering group Andritz suffered their sharpest decline in nearly seven months after the Austrian firm forecast next year’s profit to be similar to 2019, despite expecting a significant increase in sales.

North America

Wall Street’s main indexes closed at record levels for a third straight day in a muted volume session on Wednesday ahead of the Thanksgiving holiday, as fresh data pointed to an economy on solid footing, while investors remained cautiously optimistic about a resolution to US-China trade tensions.

US economic growth picked up slightly in the third quarter, rather than slowing as first reported, and a steady increase in consumer spending in October indicated the economy will probably maintain its moderate pace of growth in the fourth quarter.

The Dow Jones Industrial Average rose 42.32 points, or 0.15 per cent, to 28,164, the S&P 500 gained 13.13 points, or 0.42 per cent, to 3,153.65 and the Nasdaq Composite added 57.24 points, or 0.66 per cent, to 8,705.18.

Consumer discretionary stocks rose 0.83 to lead all sectors.

Data also showed new orders for key US-made capital goods increased by the most in nine months in October.

President Donald Trump’s comments on Tuesday that the US was in the “final throes” of work on an agreement with China added to optimism.

The main indexes have repeatedly scaled to record levels this month on trade truce hopes, a third-quarter earnings season that topped lowered expectations and a dovish Federal Reserve. The S&P 500 has now closed at a record level in five of the past nine sessions.

Trading volumes were among the lowest of the year for a full-day session ahead of the Thanksgiving Day holiday on Thursday. The stock market will close early on Friday.

Capping gains on the Dow was a 1.48 per cent drop in shares of Boeing Co after the Federal Aviation Administration said it would be the only issuer of airworthiness certificates for new 737 MAX jets, the latest hurdle in the planemaker’s bid to get the plane back in the air.

Deere & Co dropped 4.30 per cent as the farm equipment maker warned of lower earnings in 2020.

Under Armour Inc jumped 6.17 per cent as Raymond James upgraded the sportswear maker to “strong buy”.

 

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