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Global Market Report - 29 November

Lex Hall  |  29 Nov 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher after a mixed lead from overseas.

The SPI200 futures contract was up 27.0 points, or 0.39 per cent, at 6,899.0 at 7.00am Sydney time, suggesting a rise for the benchmark S&P/ASX200 on Friday.

The Australian share market yesterday hit a fresh intraday all-time high in early trading as fears about global growth and trade fade into the background.

The benchmark S&P/ASX200 index traded as high as 6,869.5 points before closing on Thursday at 6,864, up 13.4 points, or 0.2 per cent, from Wednesday.

Wall Street was closed overnight for a US holiday while in the UK the FTSE 100 dipped 0.20 per cent after four straight days of gains although the broader FTSE 250 gained 0.30 per cent.

US equity futures slipped after President Trump signed a bill backing Hong Kong protesters.

The Aussie dollar is buying 67.68 US cents from 67.67 US cents on Thursday.

Asia

China stocks closed lower on Thursday as investors feared the US government’s decision to sign a bill backing protesters in Hong Kong could derail an interim trade deal between Washington and Beijing.

The blue-chip CSI300 index ended 0.3 per cent lower at 3,862.30, while the Shanghai Composite Index closed down 0.5 per cent at 2,889.69.

China warned the US on Thursday that it would take “firm counter measures” after Trump on Wednesday signed into law congressional legislation, which supported the Hong Kong protesters. It brings fresh uncertainty to the trade talks aimed at scaling down the damaging tariff war.

Investors are also worried about China’s economic slowdown. China should lower its economic growth target to around 6 per cent for 2020 and step up stimulus as the trade war has exacerbated a protracted slowdown, government advisers said ahead of a key leadership meeting on the economy.

In Hong Kong, The Hang Seng index fell 0.2 per cent to 26,893.73, while the China Enterprises Index declined 0.6 per cent to 10,561.87.

In Japan, The Nikkei share average fell 0.12 per cent to 23,409.14, snapping a four-day winning streak while the broader Topix lost 0.17 per cent to 1,708.06, with decliners outnumbering gainers by 1,416 to 628.

Europe

European shares retreated from a four-year peak on Thursday as concerns about a US-China trade truce resurfaced after US President Donald Trump signed into law a bill supporting protesters in Hong Kong, drawing a sharp rebuke from Beijing.

The law warns of sanctions against human rights violations in Hong Kong amid pro-democracy protests. In response, Beijing said it would take “firm counter measures” in what it views as interference in an internal matter.

The pan-European STOXX 600 index fell 0.1 per cent after gaining for four straight sessions, as the diplomatic standoff threatened to derail trade negotiations between the world’s top two economies.

Shares of trade-sensitive auto parts makers led declines on the index, shedding 0.8 per cent in their worst day in more than a week.

European shares tracked global stocks higher this week as investors turned hopeful that at least a partial trade deal would be signed by the end of the year. The next important date in the dispute is 15 December, when US tariffs kick in on Chinese imports including electronics and Christmas decorations.

Investors are also closely watching economic indicators as Europe’s powerhouse—Germany—teeters on the edge of recession, although latest figures have signalled that the downturn could be bottoming out.

Fresh data on Thursday showed German annual inflation rose slightly in November, but remained well below the European Central Bank’s target level for the seventh month in a row. Traders also shrugged off a better-than-expected rebound in euro zone economic sentiment in November.

In corporate news, Virgin Money UK Plc jumped 19 per cent in its best day since going public in 2016 as it said provisions for the PPI mis-selling scandal were within its previous expectations.

British online grocer Ocado rose 3.6 per cent after saying it would open its first “mini” robotic warehouse by early 2021. The stock led the wider European retail index to a four-year high.

North America

US markets were closed for the Thanksgiving holiday and will close early on Friday.

US equity futures slipped after President Trump signed a bill backing Hong Kong protesters.

Futures on the S&P 500 Index declined 0.11 per cent; futures on the Dow Jones Industrial Average are down 0.16 per cent; futures on the tech heavy Nasdaq Composite are down 0.12 per cent.

The Dow Jones Industrial Average is up 42 points, or 15 per cent, at 28.164. The S&P500 Index is up 13 points, or 0.42 per cent, and the Nasdaq Composite is up 57 points, or 0.66 per cent.

is content editor for Morningstar Australia

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