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Global Market Report - 1 July

Glenn Freeman  |  01 Jul 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open higher on the first day of the new financial year, while Wall Street posted its best June figures in generations.

The SPI200 futures contract was up 18 points, or 0.27 per cent, at 6,577 at 8am Sydney time, suggesting an early bounce for the benchmark S&P/ASX200 on Monday.

Wall Street finished higher on Friday, with the Dow Jones Industrial Average closing up 0.28 per cent, the S&P 500 up 0.58 per cent and the tech-heavy Nasdaq Composite up 0.48 per cent.

On Saturday, the leaders of the world's two largest economies met on the sidelines of the G20 summit in Osaka, Japan. Though the meeting marked significant progress, there is still considerable work ahead before a deal is struck, and no guarantee one will eventuate.

The S&P/ASX 200 Index ended last week 32 points, or 0.5 per cent, lower at 6618.8 while the broader All Ordinaries dipped 35.1 points, or 0.5 per cent, to 6699.2.

The Aussie dollar is buying 70.31 US cents, from 70.14 US cents on Friday.


China stocks edge lower on Friday, ahead of Saturday's much-anticipated talks between presidents Xi Jinping and Donald Trump.

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At the close, the Shanghai Composite index was down 0.6 per cent at 2,978.88 – down 0.8 per cent for the week. The blue-chip CSI300 index was down 0.2 per cent on both a daily and weekly basis.

Measured over the full month of June, the Chinese market gained, particularly on the positive developments in trade talks. The Shanghai benchmark was up 2.8 per cent in June, while the CSI300 was up 5.4 per cent.

In Hong Kong, stocks ended lower for both the day and the week, though still closed in positive territory month-on-month.

At the close of trade, the Hang Seng index was down 0.3 per cent at 28,542.62 points, but gained 0.2 per cent for the week. The benchmark ended up 6.1 per cent month-on-month.

The Hang Seng China Enterprises index ended 0.1 per cent lower on Friday.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.1 per cent, while Japan’s Nikkei index closed down 0.3 per cent.

Japan stocks retreated on Friday, as investors were cautious ahead of Saturday's US-China trade talks. The drop in the Nikkei came after it rose 1.2 per cent on Thursday.

Measured over the month, the Nikkei rose 3.3 per cent – its first monthly gain since April, despite remaining largely flat over the week.

Exporters, which led the gains the previous day, lost ground. Daikin Industries shed 2.4 per cent, while Nissan Motors dropped 0.8 per cent and Nikon Corp slipped 1 per cent.


European equities were helped by a surge in German shares on Friday, which delivered their best first-half performance in more than 20 years.

The pan-European STOXX 600 on Friday closed up 0.7 per cent, with Frankfurt's trade-sensitive DAX outperforming other major indexes with a 1 per cent rise, aided by top lender Deutsche Bank AG. The bank's shares rose 3.3 per cent following a positive assessment by the US Federal Reserve.

Companies across the STOXX index gained, particularly those sectors exposed to trade tensions such as technology and automakers.

Elsewhere in Europe, the Swiss stock index rose 0.4 per cent and bourses in Paris, Madrid posted gains of between 0.6 per cent and 0.9 per cent.

London-listed stocks also rose slightly, up 0.3 per cent, even as energy stocks fell.

Travel and leisure companies saw some of the biggest gains on the STOXX, up 1.6 per cent as Merlin Entertainments – owner of Madame Tussauds – jumped 14 per cent on news of a joint acquisition by Lego founder and private equity firm Blackstone Groupe.

North America

Wall Street advanced in heavy trading, with the S&P 500 and the Dow closing the book on their best June in generations.

This came ahead of the much-anticipated trade talks between US President Donald Trump and Chinese counterpart Xi Jinping at the G20 summit.

All three major US stock indexes gained ground at the close of the week, month, quarter and first half of the year, during which time the US stock market has had a remarkable run.
The S&P 500 had its best June since 1955. The Dow posted its biggest June percentage gain since 1938, the waning days of the Great Depression.

From the start of 2019, after investors fled equities amid fears of a global economic slowdown, which sent stock markets tumbling in December, the benchmark S&P 500 jumped 17.3 per cent, its largest first-half increase since 1997.

Trump expressed hopes that his meeting with Xi at the G20 summit will be productive, but said he had not made any promises about a reprieve from escalating tariffs.

Financial stocks led the gains in the S&P 500 and the Dow after the big US banks passed the Federal Reserve's "stress test", with the central bank giving the companies a clean bill of health. The S&P 500 Bank index gained 2.4 per cent.

Trading volume spiked amid the annual restructuring of the Russell indexes, traditionally one of the largest trading days of the year.

The Dow Jones Industrial Average rose 73.38 points, or 0.28 per cent, to 26,599.96, the S&P 500 gained 16.84 points, or 0.58 per cent, to 2941.76 and the Nasdaq Composite added 38.49 points, or 0.48 per cent, to 8006.24.

All 11 major sectors in the S&P 500 ended the session in positive territory.

Financials, energy and tariff-vulnerable industrials were the biggest percentage gainers.
Shares of Apple Inc dropped 0.9 per cent following its announcement that design head Jony Ive is leaving the company.

Separately, the Wall Street Journal reported that the iPhone maker would move its Mac Pro production to China from the United States.

Constellation Brands Inc reported better-than-expected quarterly results and raised its full-year guidance due to healthy beer demand, sending its shares up 4.6 per cent.

is senior editor for Morningstar Australia

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