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Global Market Report - 12 November

Lex Hall  |  12 Nov 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open marginally higher following a dip in stocks on Wall Street.

The SPI200 futures contract was up 8.0 points, or 0.12 per cent, at 6,773.0 at 8am Sydney time, suggesting a slightly positive start for the benchmark S&P/ASX200 on Tuesday.

The Australian share market finished at a three-month closing high yesterday after a broad rally led by CSL and three of the four big banks.

The benchmark S&P/ASX200 index closed on Monday up 48.4 points, or 0.72 per cent, to 6,772.5 points, while the broader All Ordinaries was up 43.8 points, or 0.64 per cent, to 6,877 points.

On Wall Street overnight, the Dow Jones Industrial Average was down 0.03 per cent, the S&P 500 was down 0.27 per cent and the tech-heavy Nasdaq Composite was down 0.20 per cent.

The Aussie dollar is buying 68.52 US cents from 68.55 US cents on Monday.


China and Hong Kong stocks fell on Monday, with Hong Kong stocks dropping the most in nearly three months, amid worries over the political unrest in Hong Kong and downbeat data on the mainland.

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The CSI300 index fell 1.3 per cent to 3,922.20 points at the end of the morning session, while the Shanghai Composite Index lost 1.2 per cent to 2,928.04 points.

The Hang Seng index dropped 2.1 per cent to 27,070.55 points, on track for its steepest single-day drop since 13 August, while the Hong Kong China Enterprises Index lost 1.8 per cent to 10,682.66 points.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.94 per cent while Japan’s Nikkei index was down 0.24 per cent.


Demand for defensive stocks helped European shares recover from early losses on Monday as investors grappled with issues ranging from violent Hong Kong protests to an inconclusive Spanish election and weak data from China.

After falling nearly 0.5 per cent at one point, the pan-European STOXX 600 index closed flat, helped by a turnaround in bank shares and gains for sectors considered safer bets during times of economic uncertainty, such as food and beverage and real estate.

London's FTSE 100 led declines among the major regional indexes with a 0.4 per cent drop, while stocks in Frankfurt fell 0.2 per cent and Paris rose 0.1 per cent.

The exporter-heavy FTSE index was hit by a jump in the pound after the Brexit Party said it would not contest previously Conservative held seats in Britain’s upcoming election, in a boost for Prime Minister Boris Johnson.

Banks most exposed to Brexit news such as Royal Bank of Scotland and Barclays jumped about 4 per cent, countering losses in some Asian-facing banks such as HSBC and Standard Chartered, down nearly 2 per cent, after long-running Hong Kong protests turned violent.

Data earlier showed Britain’s economy grew at its slowest annual rate in nearly a decade in the third quarter, although the economy dodged outright recession.

Ratings firm Moody’s warned on Friday it might cut its rating on Britain’s sovereign debt again, saying neither main political party was likely to tackle high borrowing.

The benchmark STOXX 600 rose to its highest in over four years last week on signs of progress in US-China trade talks, but investors are wary about a deal after US President Donald Trump said he had not agreed to rollbacks of US tariffs sought by China.

European miners took the biggest hit, down 1.4 per cent after data from top metals consumer China showed producer prices fell the most in over three years in October.

London-listed shares of BHP Group slipped 2 per cent after the company touted bullish plans to expand in oil and gas, defying investors who want the world’s biggest miner to cast off the business.

Spain's main IBEX index closed flat after the weekend's parliamentary election pointed to a legislative stalemate.

Top gainer on the STOXX 600 was British takeaway food group Greggs, which jumped about 17 per cent after forecasting a 2019 pretax profit ahead of previous expectations.

Shares in recent stock market debutant TeamViewer, gained 3.6 per cent after the German software company reported a near-doubling in core profits in the third quarter.

North America

The S&P 500 and Nasdaq stock indexes fell from record highs on Monday as uncertainty about progress in US-China trade talks again rose to the fore following comments by President Donald Trump, while a jump in Boeing shares helped the Dow Jones Industrial Average eke out a slim gain.

Investor hopes of a “phase one” trade deal have been a key factor supporting stocks recently, but Trump said on Saturday that the US would only make a trade deal if it was the “right deal” for America, adding that the talks had moved more slowly than he would have liked.

Violence in Hong Kong during protests also cast a shadow on sentiment after the three major averages posted all-time closing highs on Friday, and the benchmark S&P 500 tallied its fifth week of gains in a row.

Investors will be watching for any trade commentary from Trump on Tuesday, when he is expected to speak at The Economic Club of New York.

The Dow Jones Industrial Average rose 10.25 points, or 0.04 per cent, to 27,691.49, the S&P 500 lost 6.07 points, or 0.20 per cent, to 3,087.01 and the Nasdaq Composite dropped 11.04 points, or 0.13 per cent, to 8,464.28.

Shares of Boeing Co jumped 4.5 per cent to $366.96 after the planemaker said it expected US regulators to approve the return to commercial service of its grounded 737 MAX jet in the coming weeks, and expects commercial service to resume in January.

Boeing shares are the biggest weight in the 30-component, price-weighted Dow, helping the blue-chip index tally another record close on Monday.

Walgreens Boots Alliance Inc shares gained 5.1 per cent after Bloomberg reported that KKR & Co had formally approached the drugstore giant for what could be the biggest-ever leveraged buyout.

Most of the S&P 500 sectors ended in the red, with utilities, energy and healthcare .SPXHC falling the most.

Investor attention will shift to economic data and testimony by Fed Chair Jerome Powell on the economic outlook later this week, while a handful of big companies, including Walmart, Cisco Systems and Nvidia Corp, will report earnings.

The third-quarter corporate reporting season, which is drawing to a close, has been better than expected overall, but S&P 500 companies are still expected to have posted a 0.5 per cent decline in earnings, according to Refinitiv data.

is senior editor for Morningstar Australia

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