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Global Market Report - 16 April

Emma Rapaport  |  16 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are poised to open higher, following a broad record setting rally on Wall Street with the Dow breaching and closing above 34,000 for the first time.

ASX futures were up 15 points or 0.2 per cent to 7,051 near 7am AEST suggesting a positive start to trading.

The currency edged 0.4 per cent higher.

The Dow industrials closed above 34,000 for the first time on Thursday as the blue-chip benchmark and S&P 500 posted fresh record highs on a tech stock rally fueled by falling bond yields and strong March U.S. retail sales.

The Dow Jones Industrial Average rose 305.1 points, or 0.9 per cent, to 34,035.99; the S&P 500 gained 45.76 points, or 1.11 per cent, at 4,170.42; and the Nasdaq Composite added 180.92 points, or 1.31 per cent, at 14,038.76.

Australia's share market closed Thursday at its highest level since February 2020 for a second day, and is nearing the record.

The benchmark S&P/ASX200 index closed higher by 35.5 points, or 0.51 per cent, to 7,058.6.

The All Ordinaries on Thursday closed up by 36.9 points, or 0.51 per cent, to 7,317.5 points.

The market milestone followed earlier news Australia's March unemployment rate had unexpectedly dropped to 5.6 per cent.

This was despite employers preparing for the JobKeeper wage subsidy to expire in the same month.

In ASX trade, the materials and energy sectors soared by 1.83 per cent and 1.18 per cent respectively.

Financials rose 0.43 per cent. The biggest loss was in utilities, 0.89 per cent.

Bank of Queensland posted increases in first-half cash earnings and profit, and said its retail business has improved through a growing number of home loans.

The bank reported cash earnings after tax rose nine per cent to $165 million. Net profit after tax surged by 66 per cent to $154 million. Shares were lower by 0.79 per cent to $8.83.

Qantas in a trading update said demand for domestic flights was expected to be close to pre-pandemic levels by the end of the year.

Boss Alan Joyce said Qantas still faced a massive financial loss this year. Shares were down 0.19 per cent to $5.20.

In mining, BHP rose 2.87 per cent to $47.33, Fortescue gained 3.51 per cent to $20.95 and Rio Tinto climbed 2.96 per cent to $117.71.

Gold was up 1.7 per cent at $US1,765.74 an ounce; Brent crude was up 0.4 per cent to $US66.82 a barrel; Iron ore was up 2.8 per cent to $US178.41 a tonne.

Meanwhile, the Australian dollar was buying 77.56 US cents at 7:00am, up from 77.24 this time yesterday.

Asia

China stocks ended lower on Thursday, as worries about policy tightening mounted a day ahead of China’s first-quarter GDP data release.

The blue-chip CSI300 index fell 0.6 per cent to close at 4,948.97, down 16.5 per cent from an all-time high hit on Feb. 18, while the Shanghai Composite Index lost 0.5 per cent to 3,398.99.

Analysts and traders said China’s policy tightening had begun and more upbeat economic data would reinforce Beijing’s tightening bias.

China is widening the scope of stress tests on its lenders by including all of its 4,024 banks this year, a central bank publication said on Wednesday, amid concerns over mounting debt levels of companies and financial strains in some sectors.

At the close of trade, the Hang Seng index was down 107.69 points or 0.37 per cent at 28,793.14. The Hang Seng China Enterprises index fell 0.85 per cent to 10,905.89.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.29 per cent, while Japan’s Nikkei index closed up 0.07 per cent.

Europe

European stocks closed at a record high on Thursday as a rally in commodity prices lifted mining stocks and a slate of upbeat earnings reports offset worries about the pace of COVID-19 vaccinations.

The pan-European STOXX 600 index rose 0.5 per cent in its third session of gains, with miners jumping 1.5 per cent.

The UK’s commodity-heavy FTSE 100 rose 0.6 per cent to its highest level since February 2020 as a surge in metals prices lifted shares of companies such as Rio Tinto, Anglo American and BHP.

Analysts expect earnings at STOXX 600 firms to rebound more than 50 per cent in the first quarter following a slide of nearly 40 per cent in the same quarter a year earlier, according to Refinitiv I/B/E/S data.

German real estate companies Deutsche Wohnen, LEG Immobilien and TAG Immobilien rose between 0.9 per cent and 2.5 per cent after the Constitutional Court ruled that a law putting a rent cap on apartments in Berlin was invalid.

North America

The Dow industrials closed above 34,000 for the first time on Thursday as the blue-chip benchmark and S&P 500 posted fresh record highs on a tech stock rally fueled by falling bond yields and strong March U.S. retail sales.

The Dow Jones Industrial Average rose 305.1 points, or 0.9 per cent, to 34,035.99; the S&P 500 gained 45.76 points, or 1.11 per cent, at 4,170.42; and the Nasdaq Composite added 180.92 points, or 1.31 per cent, at 14,038.76.

The S&P information technology sector also hit an all-time high. The benchmark and the communication services index were buoyed by big tech names, including Apple Inc, Microsoft Corp and Facebook Inc, which gained between 1.5 per cent and 1.9 per cent.

Helping draw in cash for such names is the fact Treasury yields, after spiking upwards at the end of March, have been in retreat as investors increasingly accept the Federal Reserve's assurances on maintaining an accommodative monetary policy despite higher inflation.

The benchmark 10-year Treasury yield slipped below 1.6 per cent for the first time since March 25.

Further bolstering sentiment was a jump in March U.S. retail sales as Americans received additional pandemic relief checks from the government. Jobless claims also fell more than expected to 576,000 last week to a one-year low.

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With Reuters

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

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