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Global Market Report - 30 November

Lex Hall  |  30 Nov 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set for a subdued open after trade uncertainty permeated a choppy session on Wall Street, with investor eyes firmly on the weekend’s meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.

At 8.00am Sydney time, the SPI futures contract was up four points, pointing to flat early trade for the ASX, after the banking sector and mining stocks lifted the bourse during the previous session.

The Aussie was steady at US 73.18 cents, up slightly from US73.16 cents yesterday.

Wall Street had lifted in late trade, despite conflicting signals from Trump ahead of the weekend’s G20 Summit in Buenos Aires, with the US Federal Reserve releasing minutes from its November meeting in which the central bank opened the debate on when to pause further interest rate hikes.

Oil edged higher, while industrial metals and gold also eked out modest gains.

In local finance news, Myer’s board will try to face down Solomon Lew and the threat of a spill at what could be the department stores’ most important AGM since it listed in 2009.

Lew has been agitating for an overhaul at the top of the ailing retailer since he became its largest shareholder in March 2017 with the purchase of a 10.77 per cent stake.

Out today: Private sector credit October; ANZ consumer confidence November; NZ building permits October.

China non-manufacturing and manufacturing PMI; Japan job-to-applicant ratio and jobless rate October, industrial production October; Eurozone unemployment rate October, CPI estimate November; UK GfK consumer confidence November; US Chicago PMI November.

ASIA

The Hang Seng index closed down 0.9 per cent at 26,451.03, while the China Enterprises Index lost 0.5 per cent to 10,584.93. China's main Shanghai Composite index ended down 1.3 per cent at 2567.44. The blue-chip CSI300 index also closed 1.3 per cent lower.

Data on Friday is expected to show China's factories struggled to grow for a second straight month in November. The official manufacturing Purchasing Managers' Index (PMI) is expected to come in at 50.2, just above the neutral mark of 50.

Foreigners were net sellers of Japanese stocks for the second consecutive week following a sharp sell-off in US equities, while news about the arrest of Nissan Motor's chairman Carlos Ghosn also soured sentiment. Overseas investors sold a net ¥511.2 billion worth of Japanese stocks, including cash equities and futures, data from Japanese stock exchanges showed, which was the highest in four weeks.

In India, data on November 30 will probably show gross domestic product grew 7.5 per cent in the July-September quarter from a year ago, down from 8.2 per cent in the previous three months.

The Nikkei India Composite PMI output index rose to 53.0 in October from 51.6 in September, helped by gains in the main services index and the manufacturing output gauge. It was the strongest expansion in private sector activity since July.

EUROPE

European shares inched up. The STOXX 600 rose as much as 0.8 per cent. The pan-European index later pared gains to close up 0.2 per cent as Wall Street fell at the open, giving back part of the rally triggered in the previous session by Powell's comments.

Deutsche Bank fell 3.4 per cent after German prosecutors said police raided six of its offices in and around Frankfurt over money laundering allegations linked to the "Panama Papers".

Elsewhere in the sector, British banks made moderate moves, from HSBC ending flat to Lloyds falling 0.3 per cent, after all seven lenders passed this year's Bank of England stress tests.

Shares in Elekta fell sharply at the open after the Swedish radiation therapy gear maker reported an unexpected drop in operating profit, while order intake was slightly short of expectations due to a sharp drop in the Americas.

Postal company Royal Mail is set to lose its place in the FTSE 100, while insurer Hiscox is likely to join Britain's top stock index in a reshuffle next week, analysts said.

NORTH AMERICA

Wall Street has closed slightly lower as tech and financial shares slumped, erasing earlier gains stemming from Federal Reserve minutes showing the central bank opened the debate on when to pause further interest rate hikes.

All three major US indexes ended the session down a fraction of a per cent.

The minutes showed almost all Fed members agreeing that another rate increase was "likely to be warranted fairly soon," but also ticked off a series of issues that had begun weighing on their view of the economy. That release briefly lifted equities to the plus side, but gains faded into the close.

Wall Street rallied a day earlier as comments from Fed Chair Jerome Powell signalled to many investors that the Fed's three-year tightening cycle could be drawing to a close.

Trump sent mixed signals on Thursday about a potential trade deal between the world's two largest economies, lending to a choppy session.

Technology shares weighed the most on all three major US stock indexes, with the S&P 500 technology sector down 0.95 per cent.

Interest rate-sensitive financials dropped 0.8 per cent, as US 10-year Treasury yields continued to fall following the release of the Fed minutes.

Among large US banks, shares of JPMorgan Chase & Co , Citigroup Inc, Bank of America Corp, Goldman Sachs Group Inc and Morgan Stanley ended the session down between 0.8 and 1.8 per cent.

Of the 11 major sectors of the S&P 500, five closed in negative territory.
Twitter dropped 4.4 per cent after a Politico report that Fox News boycotted the social media network seemed to fuel worries over a wider backlash.

Shares of teen apparel retailer Abercrombie & Finch Co jumped 20.9 per cent after forecasting better-than-expected holiday sales.

 

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