Australia

Australian shares are set to rise as shares on the tech-heavy Nasdaq extended their gains.

The Australian SPI 200 futures contract was up 15 points, or 0.2 per cent, at 6,769 points at 8.30am Sydney time on Wednesday, suggesting a positive start to trading.

The Nasdaq extended a winning streak to seven straight days but the broad market closed slightly lower as investors rotated out of large-cap tech names into other sectors seen as benefiting from President Joe Biden’s proposed US$1.9 trillion ($2.5 trillion) stimulus bill.

The Dow Jones Industrial Average fell 10.72 points, or 0.03 per cent, to 31,375.04, the S&P 500 lost 4.3 points, or 0.11 per cent, to 3,911.29 and the Nasdaq Composite added 20.06 points, or 0.14 per cent, to 14,007.70.

Locally, Crown Resorts has been found unsuitable to hold a gaming licence, forcing the company and its largest shareholder—billionaire James Packer—to prove it should be allowed to operate its flagship $2.2 billion Sydney casino, the Australian reports. 

Investors suffered broad-based losses on the Australian share market, despite most Asian markets trading higher and a good US lead.

The S&P/ASX200 benchmark index closed lower by 59.5 points, or 0.86 per cent, to 6,821.2 on Tuesday.

The All Ordinaries closed down by 58.7 points, or 0.82 per cent, at 7,102.1.

The index reached a record high of 7197.2 in February last year, before much of the world realised the effects of the pandemic.

Gold was up 0.3 per cent at $US1,835.52 an ounce; Brent oil was up 0.6 per cent to $US60.95 a barrel; Iron ore was up 2.2 per cent to $US164.10 a tonne.

Meanwhile, the Australian dollar was buying 77.23 US cents at 8.30am, down from 77.29 US cents at Tuesday's close.

Asia

China's main Shanghai Composite index closed 2.01 per cent higher at 3,603.49 points, while the blue-chip CSI300 index ended 2.19 per cent higher.

Hong Kong shares ended higher on Tuesday with energy stocks leading gains, following rising oil prices as investors were reassured by a quicker economic recovery.

At the close of trade, the Hang Seng index was up 156.72 points, or 0.53 per cent, at 29,476.19. The Hang Seng China Enterprises index rose 0.37 per cent to 11,602.76.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.42 per cent, while Japan's Nikkei index closed up 0.4 per cent.

Europe

European shares ended lower on Tuesday after a rally powered by hopes of a swifter global economic recovery and vaccine rollouts showed signs of cooling.

Utilities and the oil and gas sector led losses and countered gains in luxury and healthcare stocks.

The STOXX 600 index finished 0.1 per cent in the red after having lost up to half a percent during the day. The index has gained nearly 4 per cent so far this month against the backdrop of steady vaccine rollouts globally and expectations that US lawmakers will soon pass a huge stimulus package.

London stocks outperformed with homebuilders in the lead. Bellway and St Modwen Properties joined bigger rivals Barratt and Taylor Wimpey in providing a robust outlook for the sector as demand improved after initial covid-19 disruptions.

“We think that UK equities will outperform their peers elsewhere this year, as some of the headwinds that they faced in 2020 fade or even act as tailwinds,” Capital Economics wrote in a client note.

They cite rapid coronavirus vaccine rollout in the country aiding rotation towards pandemic-vulnerable sectors, and removal of uncertainties regarding its relationship with the European Union as some of the factors behind the view.

Energy major Total SE fell 1.8 per cent after having risen as much as 2.8 per cent. It posted better than expected earnings in the fourth quarter, although a hit from writedowns on assets due to the pandemic landed it with a US$7.2 billion ($9.3 billion) net loss for 2020.

Germany’s DAX index was down 0.3 per cent even as data showed German exports rose in December as robust trade with China and the US helped.

“The longer-term outlook (for exports) remains mixed, illustrating that the sector will still take some time before returning to full strength,” said ING’s global head of macro, Carsten Brzeski.

Among earnings, hearing aid maker Demant topped the STOXX 600 after saying it expects to return to strong growth in 2021 as covid-19 lockdowns are lifted.

Shares in Lonza rose 3.1 per cent on a US$4.7 billion deal to sell its Specialty Ingredients division to Bain Capital and Cinven.

TUI Group shed almost 4 per cent to hit a more than two-month low after the world’s biggest holiday company sunk to a 699 million euros ($844 million) loss in its first quarter.

North America

The Nasdaq extended a winning streak to seven straight days but the broad market closed slightly lower as investors rotated out of large-cap tech names into other sectors seen as benefiting from President Joe Biden’s proposed US$1.9 trillion stimulus bill.

The tech-heavy Nasdaq hit an all-time high for the fifth consecutive session on early gains in Apple Inc, Amazon.com Inc and Google-parent Alphabet Inc, which later turned lower amid a shift in portfolio allocations.

The NYSE FANG+TM index, which includes Facebook Inc, Netflix Inc and Tesla Inc, rose to an all-time high.

With the number of US covid-19 cases falling and expectations the stimulus package will be approved in Congress, investors are hard-pressed to find significant negatives, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“You’re not seeing money coming out of the market and going into cash,” James said. “You’re seeing money coming out of one sector and being rotated into another sector to maintain an overall long bias.”

Largely upbeat corporate earnings, along with monetary and fiscal support, have powered the major US stock indexes to record highs. But analysts caution the new covid variants and any glitches in vaccine rollouts could sour positive sentiment.

“The backdrop is largely positive for stocks and I’m not sure there could be a better backdrop for risk assets in the near to intermediate term,” said William Herrmann, co-founder and managing partner at Wilshire Phoenix in New York City.

The Dow Jones Industrial Average fell 10.72 points, or 0.03 per cent, to 31,375.04, the S&P 500 lost 4.3 points, or 0.11 per cent, to 3,911.29 and the Nasdaq Composite added 20.06 points, or 0.14 per cent, to 14,007.70.

The energy sector, among those that led the recent rally, slipped a bit, while communication services rose.

Data last week showing slower-than-expected jobs growth in the labour market underscored the need for more government aid to blunt the effect of the covid-19 pandemic, Biden has said.

Democrats in the US Senate continue to try to find a way to include a minimum wage increase in a comprehensive covid-19 relief bill they aim to advance in the coming weeks, Senate Majority Leader Chuck Schumer said on Tuesday.

Toymaker Mattel Inc rose, while telephone equipment maker Cisco Systems Inc slipped ahead of reporting earnings after market close.

Analysts forecast a fourth-quarter S&P earnings gain of about 2.5 per cent, a stark reversal from the 10.3 per cent annual decline seen at the beginning of the year, per Refinitiv.

Gucci lipstick maker Coty Inc tumbled as weak demand for makeup products wiped millions off its quarterly revenue.

Take-Two Interactive Software Inc fell after the videogame publisher posted a drop in quarterly adjusted sales and shied away from announcing any new big releases.

Bitcoin fast approached the US$50,000-mark as the afterglow of Elon Musk-led Tesla's investment in the cryptocurrency had investors reckoning it may become a mainstream asset class for both corporations and money managers.

Cryptocurrency miner Riot Blockchain and Marathon Patent Group extended sharp gains for the second day, but Tesla’s shares dropped.

With Reuters