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Global Market Report - 11 March

Lex Hall  |  11 Mar 2019Text size  Decrease  Increase  |  
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Australian shares are expected to open lower after a negative lead from overseas at the end of last week following growing concerns over global growth.

The SPI200 futures contract was down 14 points, or 0.23 per cent, at 6,190.0 at 8am Sydney time, suggesting a drop for the benchmark S&P/ASX200 on Monday.

On Friday, local shares hit the skids over concerns about a global growth slowdown, with nearly every sector on the local bourse in the red.

The benchmark S&P/ASX200 index was down 60.1 points, or 0.96 per cent, to 6,203.8 points at 4.15pm on Friday, while the broader All Ordinaries was down 57.1 points, or 0.9 per cent, at 6,287.1.

On Wall Street on Friday, the Dow Jones Industrial Average closed down 0.09 per cent, the S&P 500 was down 0.21 per cent and the Nasdaq Composite was down 0.18 per cent.

Concerns about global growth prospects knocked major European stock markets lower on Friday as the STOXX 600 index suffered its biggest daily percentage drop in a month and worst week this year.

CommSec chief economist Craig James said Monday could be a day of low-volume trading because of a public holiday in Victoria, South Australia, Tasmania and the ACT.

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The Aussie dollar is buying 70.33 US cents from 70.01 US cents on Friday.


Asian markets finished sharply lower on Friday with shares in China leading the region. The Shanghai Composite is down 4.40 per cent while Japan's Nikkei 225 is off 2.01 per cent and Hong Kong's Hang Seng is lower by 1.91 per cent.

China reported a sharper-than-expected fall in exports in February, reigniting concerns of a global slowdown.

Exports from Beijing in February fell 20.7 percent from a year earlier - the largest decline in three years - compared to forecasts of a 4.8 per cent drop, pointing to a further cooling in the economy despite a spate of support measures.

The data comes just a day after the European Central Bank slashed its growth forecasts, deferring rate hikes until 2020 and offering banks a new round of cheap loans, as it cautioned
that the economy was in "a period of continued weakness and pervasive uncertainty".

China has been the world’s most overheated market, with more than 70 per cent of the stocks technically above the overbought levels this week, the South China Morning Post reports.


European stocks notched up their biggest weekly fall since December on Friday, extending losses as weak China and German data and poor US jobs numbers tightened bears’ grip on the market, underscoring worries about a global economic slowdown.

The FTSE 100 is down 0.74 per cent while France's CAC 40 is off 0.70 per cent and Germany's DAX is lower by 0.52 per cent.

The STOXX 600 fell 0.8 percent on the day for its biggest weekly fall since Dec. 21, when a sharp sell-off was sweeping global markets.

Losses deepened in afternoon trading after US data showed the employment market stalled last month, creating only 20,000 jobs, the weakest since September 2017.

Eurozone bank stocks extended Thursday’s fall after the European Central Bank cut its growth forecasts and pushed out an interest rate hike.

In contrast, real estate stocks jumped 1.9 per cent as investors bet on lower-for-longer borrowing costs boosting the housing market.

Basic resources fell 1.7 per cent and autos stocks tumbled 1.3 per cent after China reported its biggest drop in exports in three years and German industrial orders unexpectedly fell.

Oil stocks were dragged lower by weak crude prices and news that Norway’s sovereign wealth fund, the world’s largest, will sell its stakes in oil and gas explorers.


Wall Street's main indexes have fallen for a fifth straight session and posted their biggest weekly declines since the market tumbled at the end of 2018, as a weak US jobs report ignited more concerns about the global economy.

But Friday's declines were only slight. Stocks significantly pared losses late in the day as investors reassessed the employment report and considered whether the market's recent slump was ending.

The eventful session came as some Wall Street watchers prepared to celebrate the 10-year anniversary of the start of the S&P 500's bull market run that took root during the financial crisis.

US employment growth almost stalled in February, with the economy creating only 20,000 jobs, adding to signs of a sharp slowdown in economic activity in the first quarter.

The payroll gains reported by the Labor Department were the weakest since September 2017.

The weak US report added to economic fears also fanned by a sharp fall in China's exports and after the European Central Bank slashed growth forecasts for the region on Thursday.

But stocks finished well above their lows for the session, as investors noted the jobs report was affected by seasonal effects and the federal government shutdown.

The Dow Jones Industrial Average fell 22.99 points, or 0.09 per cent, to 25,450.24, the S&P 500 lost 5.86 points, or 0.21 pe cent, to 2,743.07 and the Nasdaq Composite dropped 13.32 points, or 0.18 per cent, to 7,408.14.

The Nasdaq snapped a 10-week streak of weekly gains.

The closely watched Dow Jones Transportation Average fell 0.5 per cent, dropping for an 11th straight session, its longest streak of declines since 1972, according to S&P Dow Jones Indices.

The recent pullback has paused a rally to start 2019 that has been fuelled by optimism over a US-China trade deal and by beliefs the Federal Reserve will be less aggressive in raising interest rates. The S&P 500 is up 9.4 per cent this year.

Energy fell the most among the 11 major sectors, declining 2.0 per cent as oil prices also fell.

Exxon Mobil shares dropped 1.4 per cent and were among the biggest drags on the S&P.

Utilities led gains among the sectors, while two other defensive groups, consumer staples and real estate, finished positive.

is senior editor for Morningstar Australia

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