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Global Market Report - 13 April

Emma Rapaport  |  13 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to edge higher at the open despite falls on Wall Street overnight.

The Australian SPI 200 futures contract was up 15 points, or 0.2  per cent, at 6,964 points at 7am Sydney time on Tuesday, suggesting a positive start to trading.

The S&P 500 and Dow Jones industrial average ended lower on Monday, with investors waiting for cues from the upcoming corporate earnings season and a key inflation report later this week.

The Dow Jones Industrial Average fell 55.2 points, or 0.16 per cent, to 33,745.4, the S&P 500 lost 0.81 points, or 0.02 per cent, to 4,127.99 and the Nasdaq Composite dropped 50.19 points, or 0.36 per cent, to 13,850.00.

Locally, Australia's share market started the week lower as investors continued to step back from the milestone level reached on Thursday.

The benchmark S&P/ASX200 index closed down 21.2 points, or 0.3 per cent, to 6974 on Monday.

The All Ordinaries closed lower by 27.1 points, or 0.37 per cent, to 7225.2 points.

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The Morrison government ditched its vaccine timetable after health advice not to give the AstraZeneca vaccine to people under 50.

The government has since ordered 20 million more Pfizer doses.

On the ASX, the big miners were all lower as metals prices dropped.

BHP dipped 1.05 per cent to $46.18, Fortescue shed 1.63 per cent to $20.55 and Rio Tinto declined by 0.54 per cent to $114.88.

Gold was down 0.7 per cent at $US1,731.79 an ounce; Brent oil was up 0.6 per cent to $US63.34 a barrel; Iron ore was up 0.6 per cent to $US174.57 a tonne.

Meanwhile, the Australian dollar was buying 76.23 US cents at 7:00am.

Asia

China shares dropped on Monday, weighed down by materials and transport stocks, as worries over policy tightening persisted on expectations of upbeat economic data due later this month.

The blue-chip CSI300 index fell 1.7 per cent, to 4,947.75, while the Shanghai Composite index shed 1.1 per cent to 3,412.95.

Leading the declines, the CSI300 materials index and the CSI300 transport index slumped 3.9 per cent and 4.1 per cent, respectively.

Hong Kong stocks fell on Monday, tracking losses in the A-share market, as latest data pointed to signs of liquidity tightening on the mainland.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.07 per cent, while Japan’s Nikkei index closed down 0.77 per cent.

Europe

European stocks fell on Monday from all-time highs as investors booked profits ahead of the quarterly corporate earnings season, while two French utility companies surged on news of a merger deal after months of wrangling.

Shares of Veolia and Suez surged 9.7 per cent and 7.7 per cent after the waste and water management companies agreed on a merger deal worth nearly 13 billion euros ($15.4 billion).

The benchmark pan-European STOXX 600 index ended about 0.5 per cent lower after closing at a record high on Friday, with technology, travel and leisure and commodity stocks leading declines.

European earnings will kick into higher gear later in April, with analysts expecting a 47.4 per cent jump in first-quarter earnings for STOXX 600 companies, according to Refinitiv IBES data. Much of the support is likely to come from consumer cyclicals and industrial firms.

UK’s domestically focused FTSE mid 250 index dropped 0.4 per cent, hovering just below a record high as shops, pubs, gyms and hairdressers reopened after three months of lockdown.

North America

The S&P 500 and Dow Jones industrial average ended lower on Monday, with investors waiting for cues from the upcoming corporate earnings season and a key inflation report later this week.

The indexes had closed at record highs on Friday, after rallying for days on a pullback in the benchmark 10-year bond yield from 14-month highs.

With U.S. consumer price data for March due to be published Tuesday, this could drive Treasury yields higher. Big Wall Street names are due to kick off earnings season on Wednesday, giving new catalysts to buy or sell stocks in a record-high market.

Federal Reserve Chair Jerome Powell said on Sunday the U.S. economy was at an “inflection point” with expectations for faster growth in the months ahead, but he warned that a hasty reopening could lead to a continued increase in coronavirus cases.

S&P 500 earnings are expected to have jumped 25 per cent in the quarter from a year ago, according to Refinitiv IBES data. That would be the biggest quarterly gain since 2018, when tax cuts under former President Donald Trump boosted profit growth.

Banks are among the first to report earnings for the opening quarter of 2021, with Goldman Sachs, JPMorgan and Wells Fargo due on Wednesday.

The financials index and consumer discretionary sector both hit record highs on Monday, on confidence in both areas as the U.S. economy reopens.

Among the 11 major S&P 500 sector indexes, communication services and energy shares were the steepest decliners.

Overall, the Dow Jones Industrial Average fell 55.2 points, or 0.16 per cent, to 33,745.4, the S&P 500 lost 0.81 points, or 0.02 per cent, to 4,127.99 and the Nasdaq Composite dropped 50.19 points, or 0.36 per cent, to 13,850.00.

Tesla Inc rose 3.7 per cent after Canaccord Genuity upgraded the electric-car maker’s shares to “buy,” saying the company could become “the brand” in energy storage.

Nvidia Corp jumped 5.6 per cent after saying Monday it would make a server processor chip that would directly challenge Intel Corp. The chipmaker also signposted above-guidance first-quarter sales.

With Reuters

is editorial manager for Morningstar Australia. You can follow her on Twitter @rap_reports

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