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Global Market Report - 14 February

Lex Hall  |  14 Feb 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open flat despite a positive lead from Wall Street overnight.

The SPI200 futures contract was up 9 points, or 0.15 per cent, at 6,027.0 at 7am Sydney time, suggesting a slightly positive start for the benchmark S&P/ASX200 on Thursday.

Yesterday, falls by market giants CSL and Commonwealth Bank have caused the Australian sharemarket to finish in modestly negative territory.

The benchmark S&P/ASX200 index closed down 15.5 points, or 0.25 per cent, at 6,063.6 points at 4.15pm on Wednesday, while the broader All Ordinaries was down 8.6 points, or 0.14 per cent, at 6140.1.

On Wall Street, the Dow Jones Industrial Average was up 0.46 per cent, the S&P 500 was up 0.30 per cent and the Nasdaq Composite was up 0.08 per cent.

The Aussie dollar is buying 70.95 US cents from 71.30 US cents on Wednesday.

Telstra has cut its payout to shareholders after a 28 per cent dive in first-half profit to $1.2bn as it passes the halfway mark of the NBN rollout.

Treasury Wine Estate has raised a glass to shareholders, upping its interim dividend following a 15.1 per cent lift in first-half profit to $201.1 million.

Beleaguered wealth manager AMP has slashed its dividend after its full-year profit plummeted 97 per cent to just $28 million.

Out today: consumer inflation expectations for February.

ASIA

Higher risk appetite and improved sentiment boosted Asian markets, which closed sharply higher, with shares in China leading the region.

The Shanghai Composite is up 1.84 per cent while Japan's Nikkei 225 is up 1.34 per cent and Hong Kong's Hang Seng is up 1.16 per cent.

China's blue-chip CSI 300 rose about 2 per cent to a four-month high, with tech shares leading gains.

EUROPE

European shares rose on Wednesday as optimism about trade talks lifted global markets and data showed earnings growth forecasts for Europe were stabilizing after steep downward revisions.

The pan-European STOXX 600 index was up 0.6 per cent, rising for the third straight session, with Germany’s trade-sensitive DAX up 0.4 per cent.

Amid the labyrinthine twists and turns of Brexit, London’s FTSE outperformed, up 0.8 per cent to a 4-month high, as data showed British inflation fell to a two-year low in January.

Germany's DAX is up 0.37 per cent and France's CAC 40 is up 0.35 per cent.

Amundi, the eurozone’s largest asset manager, was also cheered by investors, rising 4.4 per cent, after confirming its profit targets for 2020 despite adverse market conditions in the fourth quarter.

Among other companies whose results stood out was Ingenico, up 10.5 per cent to the top of the STOXX 600, online gambling firm Kindred Group, up 7.5 per cent and Swedish Match which rose 9.2 per cent.

NORTH AMERICA

Hopes for a resolution in a prolonged trade spat between the US and China have helped extend a week-long rally in world stock markets, while bond yields have also climbed.

European shares rose 0.6 per cent on Wednesday following broad gains in Asia. MSCI's gauge of stocks across the globe gained 0.44 per cent.

Bond yields climbed as investors sold safe-haven government bonds in favour of riskier assets like equities.

US President Donald Trump said he could let a 1 March deadline for a trade deal with China "slide" if the two sides were not close on agreement. But he added he was "not inclined" to delay raising tariffs.

On Wall Street, the Dow Jones Industrial Average rose 117.51 points, or 0.46 per cent, to 25,543.27, the S&P 500 gained 8.3 points, or 0.30 per cent, to 2,753.03 and the Nasdaq Composite added 5.76 points, or 0.08 per cent, to 7,420.38.

The rise in US benchmark Treasury yields came after data showed core consumer prices rose in January. The core Consumer Price Index, excluding food and energy components, gained 0.2 per cent.

China's blue-chip CSI 300 rose around 2 per cent to a four-month high.

Progress on another issue unnerving markets - a deal to fund the US government and avoid another government shutdown - also provided a boost.

The Cboe Volatility Index, Wall Street's so-called "fear gauge," dropped overnight to 14.95, its lowest since October.

Emerging market stocks faltered, trading flat on the day. Bank of America Merrill Lynch said on Tuesday investors saw emerging markets as the "most crowded" trade for the first time ever.

In commodities, oil prices surged nearly 2 per cent.

is content editor for Morningstar Australia

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