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Global Market Report - 3 April

Lex Hall  |  03 Apr 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher as investors digest the federal government’s budget and Wall Street treads water.

At 8am Sydney time, the SPI200 futures contract was up 30 points, or 0.48 per cent, at 6,263.0, suggesting a positive start for the benchmark S&P/ASX200.

Australian shares moved higher for a sixth straight day yesterday, as markets around the world rallied on the back of positive data from the world's two largest economies.

The benchmark S&P/ASX200 index ended up 25.4 points, or 0.41 per cent, to 6,242.4 points on Tuesday, while the broader All Ordinaries was up 28.1 points, or 0.45 per cent, to 6,327.8.

On Wall Street overnight, the Dow Jones Industrial Average ended down 0.30 per cent, the S&P 500 was flat and the tech-heavy Nasdaq Composite was up 0.25 per cent.

The Aussie dollar is buying US70.69 cents from US70.85 cents yesterday.
Out today: AiG performance of services March; retail sales for February; trade for February.

ASIA

Chinese shares edged higher on Tuesday in a choppy morning session, with the benchmark equity index hitting a more than 10-month high, as investors continued to take heart from a rebound in manufacturing data and hopes for policy easing.

At the midday break, the Shanghai Composite index was up 0.41 per cent at 3,183.31 points. It had earlier risen as much as 0.56 percent, hitting its highest level since 23 May, 2018.

China’s blue-chip CSI300 index was up 0.11 per cent, having earlier touched a one-year high, with its financial sector sub-index rising 0.47 per cent. But the real estate index fell 0.26 per cent and the healthcare sub-index lost 1.1 per cent

The largest percentage gainers in the main Shanghai Composite index were AVIC Capital Co, up 10.08 per cent, followed by Asian Star Anchor Chain Co Ltd Jiangsu, gaining 10.04 per cent and Sinopec Oilfield Service Corp, up by 10.04 per cent.

Hong Kong shares edged up to a fresh nine-month high, extending the rally into sixth straight session as positive factory data from China and the US, and indications of progress in trade talks continued to bolster investor sentiment.

At the close of trade, the Hang Seng index was up 62.65 points or 0.21 percent at 29,624.67, its highest close since June 20. The Hang Seng China Enterprises index fell 0.09 per cent to 11,546.66.

EUROPE

European shares hit their highest in half a year on Tuesday, buoyed by autos and insurance stocks and gains among export-heavy London stocks as Brexit uncertainty weakened the pound.

The pan-European STOXX 600 index gained for a third straight day, hitting 385.68 - its highest since late September. It later gave up some gains, but ended up 0.4 per cent.

The FTSE 100 climbed 1 per cent to finish at a six month-closing high.

The index of automakers and parts suppliers rose 1.3 per cent, building on Monday’s 3.3 per cent gain which came after unexpectedly strong Chinese factory data.

German auto parts supplier Continental AG climbed 2.3 per cent, and said it was sticking to plans list its powertrain division.

Tyre-maker Pirelli rose 2.9 per cent after the Italian firm said it saw a 107 million euros first-half boost from Brazilian tax credits.

European insurers gained 0.9 per cent, propped up by London-listed names such as Prudential and Old Mutual, which both rose at least 2.9 per cent.

The pound slid as Britain moved toward potentially leaving the European Union on 12 April without a orderly withdrawal deal or alternatively perhaps an election, pushing up stocks of UK firms with significant overseas earnings.

European banks rose 0.7 per cent, with Swedbank AB jumping 6.1 per cent in its best one-day showing in more than six years.

NORTH AMERICA

The benchmark S&P 500 stock index paused on Tuesday, taking a breather from Monday’s strong quarterly kick-off as a decline in shares of Walgreens Boots Alliance weighed and economic data did little to ease growth concerns.

Walgreens shares slumped 12.8 per cent after the drugstore chain cut its 2019 profit growth forecast and reported a quarterly profit that missed analyst estimates.

The S&P 500 consumer staples index, which includes Walgreens, dropped 0.8 per cent. Shares of rival drugstore company CVS Health Corp fell 3.8 per cent. Shares of drug wholesalers AmerisourceBergen Corp, Cardinal Health and McKesson Corp also slid.

Walgreens shares weighed the most on all three of Wall Street’s major indexes. CVS and the drug wholesalers were also among the biggest drags on the S&P 500.

The Nasdaq moved higher, however, as shares of Facebook jumped 3.3 per cent.

Data showing that new orders for key US-made capital goods slipped in February and that shipments were flat did little to lift tepid investor sentiment.

Orders for non-defence capital goods excluding aircraft, or core capital goods orders, a closely watched proxy for business spending plans, fell 0.1 per cent. Economists polled by Reuters had forecast it to remain unchanged.

The data comes on the heels of a survey showing a surprise rebound in China’s manufacturing activity and better-than-expected US numbers, which drove the S&P 500 to near six-month highs on Monday.

The Dow Jones Industrial Average fell 79.29 points, or 0.30 per cent, to 26,179.13, the S&P 500 gained 0.05 points to 2,867.24, and the Nasdaq Composite added 19.78 points, or 0.25 per cent, to 7,848.69.

Despite coming under pressure, the S&P 500 is only 2.2 per cent below a record closing high hit in late September as the Federal Reserve has paused interest-rate hikes and investors have grown optimistic about a resolution to the US-China trade war.

is content editor for Morningstar Australia

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