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Global Market Report - 9 October

Lex Hall  |  09 Oct 2020Text size  Decrease  Increase  |  
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Australia

Australian shares are set to edge up on Friday as Wall Street gained overnight amid hopes of a new stimulus package.

The Australian SPI 200 futures contract was up 2 points, or 0.03 per cent, to 6,087 points at 8.30am Sydney time on Friday, suggesting a flat start to trading.

US stocks ended higher on Thursday as comments by US President Donald Trump fuelled hopes of fresh fiscal support, while data underscored the view that the labor market recovery was struggling to gain momentum.

The Dow Jones Industrial Average rose 122.31 points, or 0.43 per cent, to 28,425.77, the S&P 500 gained 27.41 points, or 0.80 per cent, to 3,446.86 and the Nasdaq Composite added 56.38 points, or 0.5 per cent, to 11,420.98.

Locally, in his first budget-in-reply speech as Opposition Leader, Anthony Albanese moved to position Labor as the champions of female workforce participation through a $6.2 billion childcare plan aimed at getting mums back to work.

The S&P/ASX200 benchmark index finished higher by 65.8 points, or 1.09 per cent, to 6,102.2 on Thursday. The index is 5.36 per cent higher for the week, on course for its best since April. The All Ordinaries index closed better by 66.4 points, or 1.06 per cent, to 6,306.

Gold was up 0.3 per cent at $US1,892.27 an ounce; Brent oil was up 3.3 per cent to $US43.37 a barrel. Iron ore was last trading at US$123.47 a barrel before the week-long China holiday. 

Meanwhile, the Australian dollar was buying 71.64 US cents at 8.30am, up from 71.51 US cents at Thursday’s close.

Asia

Japanese shares closed higher on Thursday, following an upbeat Wall Street session overnight, as hopes for a partial deal on US coronavirus stimulus boosted investor sentiment.

The benchmark Nikkei share average rose 0.96 per cent to 23,647.07, hovering near levels hit on 20 February. There were 134 advancers on the index against 84 decliners.

The broader Topix gained 0.55 per cent to 1,655.47.

Chinese markets will reopen after a week-long holiday on Friday.  

Europe

European stocks inched higher on Thursday, joining a global rally on hopes of more US stimulus, with positive brokerage recommendation on ad firms and upbeat forecast from bookmaker GVC Holdings boosting sentiment.

The pan-European STOXX 600 index rose 0.4 per cent to hover near a two-week high hit earlier this week. The German DAX gained 0.4 per cent, but France's CAC 40 and London's FTSE 100 were up just marginally.

Ladbrokes and Bwin owner GVC Holdings jumped 6.4 per cent after it raised its annual earnings outlook on the back of a surge in online gaming and as sports events such as the English Premier League resumed.

Travel and leisure stocks led the gains, with shares in peer Flutter Entertainment up 2.3 per cent.

Helping keep the positive mood, Wall Street indexes surged overnight on signs that talks over aid to the airline industry were progressing in Washington even as US President Donald Trump called off talks on a more comprehensive deal.

“It’s a sentiment driver for the market at the moment,” said Roger Jones, head of equities at London and Capital. “The market has become very fiscally orientated, yet the numbers provided can only provide a short-term boost.”

An upgrade by Goldman Sachs to "buy" helped German television network ProSieben jump 5.1 per cent higher, while Publicis rose 2.4 per cent after the US investment bank said it expects the French ad firm to outperform global peers in the third quarter.

Ratos jumped 5.2 per cent after US business analytics company Dun & Bradstreet said it would acquire Europe's Bisnode from the Swedish private equity firm.

Mediobanca rose 3 per cent after eyewear tycoon Leonardo Del Vecchio raised his stake to just above 10 per cent in Italy's top investment bank.

Sensor maker AMS slipped 2.6 per cent as it posted third-quarter sales near the upper end of its guidance range and announced issuance of bonds to secure long-term financing.

North America

Two days after calling off negotiations on a comprehensive bill, Trump in an interview with Fox News said talks with Congress have restarted over further covid-19 relief and that there was a good chance a deal could be reached. But he gave no other details about a possible agreement.

While late afternoon trading was choppy, indexes added to gains after a White House spokeswoman said Trump wanted a “skinny” coronavirus relief bill.

House of Representatives Speaker Nancy Pelosi said legislation to help airlines was a matter of national security and could only move through Congress with guarantees of work continuing on the comprehensive deal.

The Dow Jones airlines index extended recent gains.

“We’re clearly being pushed around by the prospect of getting further fiscal stimulus. That’s entirely the driver,” said Art Hogan, chief market strategist at National Securities in New York.

“The market is just reacting to every utterance of where we stand on fiscal policy.”

Data on Thursday showed the number of Americans filing new claims for jobless benefits drifted lower last week but signalled the labour market was making little headway in getting millions of people back on the job after being out of work due to covid-19 disruptions.

Strategists say investors are also beginning to digest the prospect of Democratic presidential nominee Joe Biden winning the 3 November election.

Biden appeared to lead Trump among likely voters in Florida and the two were locked in a tight race in Arizona, according to Reuters/Ipsos opinion polls released on Wednesday.

“What the market is actually starting to warm up to is a Democratic sweep in the election cycle. If it’s a decisive win, you take away the drama of a contested election,” Hogan said.

International Business Machines Corp shares rose after saying it was splitting itself into two public companies, capping its years-long effort to diversify away from its legacy businesses to focus on high-margin cloud computing.

Eaton Vance Corp shares surged after Morgan Stanley agreed to buy the asset manager for about US$7 billion ($9.7 billion) in a cash-and-stock deal.

is content editor for Morningstar Australia

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