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Global Market Report - 10 December

Glenn Freeman  |  10 Dec 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open flat or slightly lower after stocks on Wall Street dipped overnight.

At 7am Sydney time, the SPI200 futures contract was down 5 points, or 0.07 per cent, at 6,724, suggesting a lacklustre start for the benchmark S&P/ASX200.

On Wall Street, the Dow Jones Industrial Average was down 0.27 per cent, the S&P 500 was down 0.18 per cent and the tech-heavy Nasdaq Composite was down 0.22 per cent.

The ASX ended higher yesterday, Australian shares closing 0.34 per cent higher, or 23 points, at 6,730.

The Aussie dollar is buying 68.32 US cents, the same exchange rate as on Monday.

Ahead today: RBA governor Philip Lowe to speak at AusPayNet Summit; NAB November business survey; China's November CPI and PPI data

Asia

China's blue chip stocks ended lower on Monday, after the latest trade data highlighted the negative effect of the prolonged US-China trade war on manufacturing companies.

The blue-chip CSI300 index fell 0.2 per cent to 3,895.45, while the Shanghai Composite Index added 0.1 per cent to 2,914.48.

China's exports in November dropped for the fourth consecutive month, but growth in imports may suggest Beijing's stimulus efforts are supporting demand.

China and the United States are negotiating a so-called "phase one" deal aimed at de-escalating their prolonged trade dispute, but it is unclear whether such an agreement can be reached in the near term.

In Hong Kong, stocks remained flat despite gains earlier on Monday, as investor caution over China's latest weak export data and the months-long protests continued.

The Hang Seng index was unchanged at 26,494.73, while the China Enterprises Index was unchanged at 10,408.05.

Japanese shares rose on Monday on the back of positive US jobs data, but gains were limited by concerns about the Chinese economy and the looming deadline for US tariffs on Chinese goods.

The Nikkei 225 index ended Monday up 0.33 per cent at 23,430.70, with consumer discretionary and industrial sectors leading gains. The benchmark is up for a third straight session.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.29 per cent.

Europe

European stocks fell on Monday as worries about a Chinese economic slowdown and the US-China trade war outweighed Friday's strong US jobs data.

The Federal Reserve meets on Wednesday and new European Central Bank chief Christine Lagarde holds her first policy meeting on Thursday, which will also see a parliamentary election in Britain, with the results due on Friday.

European shares slipped on Monday. The Euro STOXX 600 was down marginally, while the German DAX dropped 0.1 per cent. France's CAC 40 shed 0.2 per cent and the FTSE 100 was flat.

Britain’s biggest retailer Tesco jumped 4.1 per cent, and was the top gainer in the benchmark index, after the company signalled a review of its remaining Asian businesses.

Tullow Oil Plc hit a 15-year low after the oil and gas explorer said its chief executive Paul McDade resigned and it also scrapped its dividends.

In currency markets, the British pound made more gains, rising to a new seven-month high of $US1.3180 as investors raised their bets on a Conservative Party victory - and a ruling majority in parliament - in Thursday's general election.

Government bond markets were little moved as investors awaited the central bank meetings.

North America

US stocks pulled back on Monday from near-record levels, as shares of Apple Inc and healthcare companies fell.

Investors are bracing as Beijing and Washington negotiate a first phase trade deal aimed at de-escalating tariff disputes, but the two countries continue to wrangle over key details.

The Dow Jones Industrial Average fell 105.32 points, or 0.38 per cent, to 27,909.74, the S&P 500 lost 9.95 points, or 0.32 per cent, to 3,135.96 and the Nasdaq Composite dropped 34.70 points, or 0.4 per cent, to 8,621.83.

Pressuring the Dow was 3M, which fell 1 per cent after Citigroup cut its rating on the industrial conglomerate's shares.

Apple suppliers Qorvo and Skyworks Solutions rose about 3 per cent each, leading gains on the S&P 500, after Bank of America Merrill Lynch upgraded shares of both companies.

Merck dipped 0.5 per cent after it said it would buy cancer drug developer ArQule for $US2.7 billion ($A4.0 billion) in cash. Shares of ArQule doubled in value following the news.

is senior editor for Morningstar Australia

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