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Global Market Report - 11 December

Glenn Freeman  |  11 Dec 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open flat after Wall Street stocks dipped overnight towards the close.

The SPI200 futures contract was up 2 points, or 0.03 per cent, at 6,719 at 7am Sydney time, suggesting little movement at the start for the benchmark S&P/ASX200 on Wednesday.

On Wall Street, the Dow Jones Industrial Average finished down 0.10 per cent, the S&P 500 was down 0.11 per cent and the tech-heavy Nasdaq Composite was down 0.07 per cent.

On Tuesday, the S&P/ASX 200 Index dropped 23.1 points, or 0.3 per cent, to 6706.9, ending a three day winning streak for the local market.

Some of Australia's big banks led the losses, with National Australia Bank's share price declining 1.5 per cent on analyst predictions of a further dividend cut in fiscal 2020.

ANZ shares also fell 0.7 per cent.

The Aussie dollar is buying 68.14 US cents from 68.26 US cents on Tuesday.

Ahead today: Westpac Bank-Melbourne Institute consumer confidence survey for December; US November CPI and Federal Reserve policy decision

Asia

China stocks were largely flat on Tuesday, with trading subdued as investors wait to see if the US will place new tariffs on Chinese goods on 15 December – and thereby further prolong the trade war.

The blue-chip CSI300 index rose 0.1 per cent to 3,900.38, while the Shanghai Composite Index also gained 0.1 per cent to 2,917.32 points.

China’s CSI 300 financial sector sub-index dipped 0.29 per cent, the consumer staples sector was down 0.5 per cent, the real estate index lost 0.54 per cent and the healthcare sub-index rose 0.98 per cent.

The smaller Shenzhen index was up 0.38 per cent and the start-up board ChiNext Composite index was higher by 0.75 per cent.

Hong Kong shares ended lower on Tuesday, again due to investor caution ahead of the 15 December decision on tariffs.

Negative data from China's producers also knocked sentiment, as prices fell for the fifth straight month in November.

The Hang Seng index ended 0.2 per cent lower at 26,436.62, while the China Enterprises Index lost 0.1 per cent to 10,395.27 points.

The sub-index of the Hang Seng tracking energy shares dipped 0.3 per cent, while the IT sector dropped 0.3 per cent, the financial sector ended 0.1 per cent lower and the property sector closed 0.23 per cent weaker.

It was more of the same in Japan, where shares also dipped on Tuesday amid uncertainty ahead of the 15 December tariff decision.

The Nikkei 225 index ended Tuesday down 0.08 per cent at 23,410.19, with industrial and consumer discretionary sectors falling the most.

The biggest percentage losers were chemicals company Tokuyama Corp, whose shares dropped 4.29 per cent, parcel delivery firm Yamato Holdings' shares ended down 3.32 per cent and Kansai Electric Power lost 3.28 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.16 per cent.

Europe

European shares followed the same trend, as the 15 December deadline for a US decision on new tariffs on Chinese companies loomed.

But news later in the day about a delay to the latest tariffs provided a small boost. The pan-regional STOXX 600 index closed down 0.3 per cent on Tuesday, recovering from a fall of up to 1.2 per cent earlier in the day.

Frankfurt's trade-sensitive DAX also fell 0.3 per cent, recovering slightly from earlier falls of 0.64 per cent.

A 7.4 per cent fall in French car parts maker Valeo led losses in the auto sector. Consumer stocks, including some food and beverage companies, and financials also fell sharply.

Real estate, utilities and healthcare stocks gained, as drug maker Sanofi posted its best day in three years on a revamped margin outlook.

London's FTSE 100 fell 0.3 per cent, as opinion polls favour the incumbent Conservative party in Thursday's federal election.

North America

US stocks ended slightly lower yesterday after reports a new round of tariffs that were set to kick in on 15 December may be delayed.

The Dow Jones Industrial Average fell 27.88 points, or 0.1 per cent, to 27,881.72, the S&P 500 lost 3.44 points, or 0.11 per cent, to 3,132.52 and the Nasdaq Composite dropped 5.64 points, or 0.07 per cent, to 8,616.18.

Apple shares, which are often sensitive to news on trade, gained 1.1 per cent. The broader S&P 500 technology sector rose 0.5 per cent.

The communication services sector slipped, weighed down by Netflix's 2.1 per cent fall.

The Federal Open Market Committee's two-day policy meeting kicks off on Tuesday and investors are expecting updates from the central bank on its 2020 economic outlook.

Shares in Autozone jumped 8 per cent after the auto parts retailer beat quarterly estimates for profit. Shares of peers Advance Auto Parts and O'Reilly Automotive also rose.

is senior editor for Morningstar Australia

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