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Global Market Report - 1 April

Lex Hall  |  01 Apr 2019Text size  Decrease  Increase  |  
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Australian shares are expected to open higher following gains on Wall Street at the end of last week amid upbeat sentiment on US-China trade talks.

The SPI200 futures contract was up 18 points, or 0.29 per cent, at 6,189.0 at 8am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Monday.

On Friday, Australian shares sank in late trading to finish nearly flat for the day.
The benchmark S&P/ASX200 index lost 33 points in the final 93 minutes of trade to finish up just 4.6 points, or 0.07 per cent, to 6,180.7 points on Friday. The broader All Ordinaries closed up 5.2 points, or 0.08 per cent, at 6,261.7.

On Wall Street on Friday, the Dow Jones Industrial Average closed up 0.82 per cent, the S&P 500 was up 0.67 per cent and the tech-heavy Nasdaq Composite was up 0.78 per cent.

The Aussie dollar is buying 71.27 US cents from 70.97 US cents on Friday.

Investors will be focused on tomorrow’s federal budget and an RBA meeting.

Out today: AiG performance of manufacturing March; CoreLogic dwelling prices for March; MI inflation March year over year; NAB business survey March - business conditions and confidence.


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China stock closed higher on Friday to clock the third straight month of gains, as investors cheered Beijing’s pledge to further liberalise financial markets, and on renewed hopes of progress in US-China trade talks.

The blue-chip CSI300 index ended up 3.9 per cent to 3,872.34 points, while the Shanghai Composite Index closed up 3.2 per cent at 3,090.76 points.

For the week, CSI300 edged up 1 per cent, SSEC slipped 0.4 per cent.

Hong Kong stocks closed higher on Friday to log their third monthly gain.

The Hang Seng index rose 1.0 per cent to 29,051.36, while the China Enterprises Index gained 0.8 per cent to 11,379.62.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.75 per cent, while Japan’s Nikkei index closed up 0.82 per cent.


European shares rose on Friday and headed for their best quarterly performance in four years, helped by encouraging signals from US-China trade talks and a surge for the world’s second-biggest apparel retailer, H&M.

The pan-European STOXX 600 index gained 0.6 per cent. All major European indexes rose, with France’s CAC outperforming with a 0.5 per cent gain and Germany’s trade-sensitive DAX was up 0.3 per cent.

Britain’s exporter-heavy FTSE 100 was up 0.6 per cent and Dublin’s ISEQ, which typically moves on Brexit- related news, gained 0.1 per cent.

Swedish-based H&M was among the shares gaining the most, rising 12.2 percent. The retailer reported its first-quarter pre-tax profit fell less than expected as it sold more products at full price and improved its margins.

H&M shares helped push up the retail index, which has risen nearly 20 per cent this quarter.
The European labour market is robust, and the gains in personal income are boosting retail sales, said Bert Colijn an economist at ING.


US stocks ended the final trading day of the first quarter on a strong note on Friday and the S&P 500 posted its best quarterly gain since 2009, boosted by optimism over the latest round of trade talks between the US and China.

The two sides said they made progress in trade talks that concluded on Friday in Beijing. The talks, aimed at resolving a nearly nine-month trade dispute between the world's two largest economies, were called "candid and constructive" by Washington.

A Chinese delegation led by vice-premier Liu He will head to Washington next week for another round of talks.

The benchmark S&P 500 rose 13.1 per cent in the quarter, its biggest quarterly gain since the third quarter of 2009 and its best first quarter since 1998.

Trade-sensitive industrials rose 1 per cent, while chipmakers, which have a large revenue exposure to China, also gained, with the Philadelphia chip index up 1.6 per cent.

The broader technology sector gained 1 per cent.

The Dow Jones Industrial Average rose 211.22 points, or 0.82 per cent, to 25,928.68, the S&P 500 gained 18.96 points, or 0.67 per cent, to 2,834.4 and the Nasdaq Composite added 60.16 points, or 0.78 per cent, to 7,729.32.

For the quarter, the Dow gained 11.2 per cent, its biggest quarterly rise since 2013, while the Nasdaq jumped 16.5 per cent in its best quarter since 2012.

All three major indexes posted gains of at least 1 per cent each for the week and registered gains for the month as well.

Ride-hailing startup Lyft surged more than 20 per cent after making its debut on the Nasdaq. The stock ended up 8.7 per cent.

Data released on Friday showed US consumer spending barely rose in January and income increased modestly in February, suggesting the economy was losing momentum after growth slowed in the fourth quarter.

Growth fears were triggered last week, when the Federal Reserve abandoned projections for interest rate hikes in 2019 and the US Treasury yield curve inverted for the first time since 2007, historically a harbinger of recession.

However, the yield curve between three-month bills and 10-year notes turned slightly positive on Friday, after being inverted for a week.

White House economic adviser Larry Kudlow told Axios on Friday that the Fed should "immediately" cut interest rates by half a percentage point.

With the first quarter earnings reporting season just about two weeks away, investors are bracing for what may be the first US profit decline since 2016. Analysts expect quarterly earnings to fall 1.9 per cent from a year earlier, according to Refinitiv data.

Wall Street will be watching economic data with a laser focus next week after the recent warning signals from Treasury yields.

is senior editor for Morningstar Australia

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