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Global Market Report - 8 March

Lex Hall  |  08 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open lower amid concerns about a global slowdown in growth.

The SPI200 futures contract was down 35 points, or 0.56 per cent, at 6,235 at 8am Sydney time, suggesting a drop for the benchmark S&P/ASX200 on Friday.

Shares yesterday hit a six-month high despite falls from major miners trading ex-dividend and disappointing retail sales figures.

The benchmark S&P/ASX200 index closed up 18.3 points, or 0.29 per cent, to 6,263.9 points at 4.15pm on Thursday, while the broader All Ordinaries was up 17.4 points, or 0.28 per cent, at 6344.2.

There were losses on the US and the major European markets overnight after the European Central Bank slashed its 2019 growth and inflation forecasts, acknowledging the bloc's slowdown was longer and deeper than earlier thought.

On Wall Street, the Dow Jones Industrial Average was down 0.78 per cent, the S&P 500 was down 0.81 per cent and the Nasdaq Composite was down 1.13 per cent.

The Aussie dollar is buying 70.09 US cents from 70.46 US cents on Thursday.

ASIA

Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.14 per cent, while the Hang Seng led the Nikkei 225 lower. They fell 0.89 per cent and 0.65 per cent respectively.

Shares in Han’s Laser Technology Group are no longer available for purchase after the company hit the new 28 per cent limit on foreign ownership. MSCI will remove the company from its benchmarks on Monday.

Midea Group, China’s biggest maker of electric home appliances, is now also close to the limit on foreign ownership, according to data provided by the Shenzhen exchange.

This is the first time a company’s shares have been off limits to foreign buyers since 2015, when that happened to shares of Shanghai International Airport, The South China Morning Post reports.

EUROPE

European markets finished lower with shares in Germany leading the region.

The DAX is down 0.60 per cent while London's FTSE 100 is off 0.53 per cent and France's CAC 40 is lower by 0.39 per cent.

Several blue-chip stocks traded ex-dividend and financial stocks were hit after the European Central Bank delayed a rate hike at least until next year and offered a fresh round of cheap loans to banks.

The ECB president Mario Draghi says the eurozone economy will now expand only 1.1 per cent this year, a drop of 0.6 percentage point from the forecast given out just three months ago.

Draghi says s package of assistance from new loans for banks to a longer pledge on record-low rates is intended to expand the institution's existing stimulus.

NORTH AMERICA

Wall Street’s main indexes fell for a fourth consecutive session on Thursday, after Europe’s central bank said it would defer interest rate hikes and offered banks a new round of cheap loans, raising fresh concerns about global economic growth.

Stocks have stalled after a strong rally to start 2019 that was fuelled by optimism over a US-China trade deal and expectations the Federal Reserve will be less aggressive on interest rates. The benchmark S&P 500 has climbed 9.7 per cent this year, but investors have said it is unclear what will drive the next move higher for stocks.

On Thursday, the Dow Jones Industrial Average fell 200.23 points, or 0.78 per cent, to 25,473.23, the S&P 500 lost 22.52 points, or 0.81 per cent, to 2,748.93 and the Nasdaq Composite dropped 84.46 points, or 1.13 per cent, to 7,421.46.

The closely watched Dow Jones Transport Average fell 1 per cent, its 10th consecutive drop for its longest streak of declines since February 2009.

The transport index was dragged down by FedEx Corp shares, which fell 3 per cent as Citigroup cut its quarterly profit estimates and price target for the package delivery company.

The S&P 500 closed below its 200-day moving average, a closely watched technical level, for the first time in about a month.

Consumer discretionary and financials were the worst performing major S&P 500 sectors. Utilities, a defensive group, was the lone major sector in positive territory.

Adding to the dour market tone, Kroger Co shares tumbled 10 per cent after the grocer projected annual profit below Wall Street estimates.

is content editor for Morningstar Australia

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