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Global Market Report - 14 April

Emma Rapaport  |  14 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to open higher as the S&P 500 closed at another record high overnight. Investors shook off concerns about the halt in Johnson & Johnson’s COVID-19 vaccine rollout and strong US inflation.

The Australian SPI 200 futures contract was up 19 points, or 0.3 per cent, at 6,971 points at 7am Sydney time on Wednesday, suggesting a positive start to trading.

The S&P 500 closed at another record high on Tuesday and the Nasdaq composite index jumped.

The Dow Jones Industrial Average fell 68.13 points, or 0.2 per cent, to 33,677.27; the S&P 500 gained 13.6 points, or 0.33 per cent, at 4,141.59; and the Nasdaq Composite added 146.10 points, or 1.05 per cent, at 13,996.10.

Locally, Australia's share market moved little for a third consecutive session, but consumer price data due in the US threatens to reignite inflation fears and send markets downwards.
The benchmark S&P/ASX200 index closed up 2.9 points, or 0.04 per cent, to 6,976.9 on Tuesday.

The index rose to a session high of 6,998 early, as investors tested the 7,000 level, which the ASX200 briefly rose above last week.

In the last hour of trade, the index fell to a session low of 6,962.9.

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However, a late upswing helped investors avoid losses for a third consecutive session.
The All Ordinaries closed higher by 5.8 points, or 0.08 per cent, to 7,231.

The top sector was information technology, which gained 2.16 per cent. The heavyweight financial sector rose 0.28 per cent.

Losing sectors included energy and materials, which declined 0.72 and 0.67 per cent respectively.

Australia had good economic news on Tuesday. The National Australia Bank monthly business survey showed business conditions were good in March, despite the expiry of the JobKeeper wage subsidy.

Zip surged by 16.95 per cent to $9.73 after providing its third-quarter figures. The company claimed record quarterly sales of $114.4 million, an 80 per cent increase on the same quarter last year. The US business, called Quadpay, improved sales by 188 per cent to $54.4 million.

Gold was up 0.7 per cent at $US1,745.58 an ounce; Brent oil was up 0.9 per cent to $US63.85 a barrel; Iron ore was down 0.8 per cent to $US173.25 a tonne.

Meanwhile, the Australian dollar was buying 76.46 US cents at 7:00am, up from 76.23 this time yesterday.

Asia

China stocks ended lower on Tuesday, extending losses into a third day on weakness in financials and consumer discretionary shares, as robust trade data added to investor concerns that authorities could begin to tighten policy.

At the close, the Shanghai Composite index was down 0.48 per cent at 3,396.47, its third day of losses. The blue-chip CSI300 index ended down 0.16 per cent, turning lower from midday gains.

The financial sector sub-index fell 0.44 per cent, the real estate index dipped 0.89 per cent and the consumer discretionary sector slumped 2.45 per cent.

China’s exports grew strongly in March on improving global demand as COVID-19 vaccinations progress, and import growth hit a four-year high, adding to signs of a solidifying recovery in the world’s second-largest economy.

Investor concerns that a recovering economy could prompt policy tightening have been a consistent drag on A-shares in recent weeks, despite officials emphasising policy continuity.
Hong Kong’s Hang Seng index rose on Tuesday in a quiet session as financial firms rebounded following two days in the red, and as robust China trade data for March lifted investors’ confidence in the global recovery.

At the close of trade, the Hang Seng index was up 43.97 points or 0.15 per cent at 28,497.25. The Hang Seng China Enterprises index fell 0.22 per cent to 10,850.53.

Europe

European shares hovered just below all-time highs on Tuesday, little changed by US inflation data that suggested the Federal Reserve’s accommodative policy stance would remain intact.

The benchmark STOXX 600 has surged to record highs this month after coming under pressure in March from rising bond yields, as central banks globally maintained an accommodative monetary stance despite fears of a jump in inflation.

Johnson & Johnson on Tuesday said it would delay the rollout of its COVID-19 vaccine in Europe and was reviewing cases of extremely rare blood clots in people after they received the shot.

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

North America

The S&P 500 closed at another record high on Tuesday and the Nasdaq composite index jumped, as investors shook off concerns about the halt in Johnson & Johnson’s COVID-19 vaccine rollout and strong US inflation.

The drugmaker’s shares hit a one-month low before recovering some losses to close down 1.3 per cent, as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic.

US futures initially dropped on the J&J news, but pared losses after the CPI data. Solid demand for Tuesday’s US Treasuries issue pushed down yields further, highlighting investors’ lack of concern about any imminent bump in interest rates.

Instead, in one of the year’s quietest sessions, high-flying technology names that flourished during coronavirus-induced lockdowns last year attracted renewed buying that boosted Apple Inc, Microsoft Corp and Amazon.com Inc. The trio gained between 0.6 per cent and 2.4 per cent.

The wider technology sector rose 1 per cent, and the NYSE FANG+TM Index climbed 1.7 per cent to a record 12th straight higher close.

The Dow Jones Industrial Average fell 68.13 points, or 0.2 per cent, to 33,677.27; the S&P 500 gained 13.6 points, or 0.33 per cent, at 4,141.59; and the Nasdaq Composite added 146.10 points, or 1.05 per cent, at 13,996.10.

First-quarter earnings season begins in earnest on Wednesday, with Goldman Sachs, JPMorgan and Wells Fargo reporting.

With Reuters

is the editorial manager for Morningstar Australia. Connect with Emma on Twitter @rap_reports. You can email Morningstar's editorial team editorialAU[at]morningstar[dot]com

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