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Global Market Report - 16 March

Lex Hall  |  18 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher after Wall Street rose at the end of last week, buoyed by tech companies and positive sentiment on trade.

The SPI200 futures contract was up 35 points, or 0.57 per cent, at 6,206.0 at 8am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Monday. The ASX closed the week marginally lower after a seesaw day on Friday.

The benchmark S&P/ASX200 index was down 4.4 points, or 0.07 per cent, to 6,175.2 points, while the broader All Ordinaries was down 1.7 points, or 0.03 per cent, at 6,265.1.

On Wall Street on Friday, the Dow Jones Industrial Average was up 0.54 per cent, the S&P 500 was up 0.50 per cent and the tech-heavy Nasdaq Composite was up 0.76 per cent.

The Aussie dollar is buying 70.87 US cents from 70.84 US cents on Friday.

ASIA

The Hong Kong market closed higher on Friday, after China pledged to prop up slowing economic growth and appeared to make progress in its trade talks with the US.

At the close of trade, the Hang Seng index was up 0.6 per cent at 29,012.26 points, while the Hang Seng China Enterprises index rose 0.5 per cent. The Hang Seng gained 2.8 per cent this week, while H-shares were up 3.1 percent week-on-week.

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The sub-index of the Hang Seng tracking energy shares rose 1.5 per cent, while the IT sector gained 1.1 per cent, the financial sector ended 0.3 per cent higher and the property sector rose 0.4 per cent.

A group of Hong Kong-listed companies, including market leaders Tencent Holdings, CK Hutchison Holdings and China Mobile, are reporting their full year 2018 earnings next week.

EUROPE

European shares closed at their highest level in five months on Friday as investors cheered positive signs on US-China trade talks and UK politicians’ vote to request a delay in a potentially chaotic exit from the EU.

The pan-European STOXX 600 was up 0.7 per cent, its biggest gain in a month, and ended the day at its highest level since 4 October. All major bourses were in positive territory, led by Paris's CAC 40, up 1 percent.

London’s FTSE 100 rose 0.6 per cent, lifted by heavyweight oil and mining stocks that were boosted by higher metals and crude prices. Germany’s trade-sensitive DAX was up 0.85 per cent.

The mood was boosted by growing expectations that Britain will not leave the European Union on March 29 without a deal to minimise economic disruption following Thursday night's parliamentary votes.

London's domestically focused midcap index rose 1.1 per cent as sterling rallied in late trading.

Still, technology stocks, which are particularly exposed to China, rallied 2.6 per cent, their best day in five months.

NORTH AMERICA

US stocks rose on Friday, led by technology companies, as a report on progress in US-China trade talks lifted sentiment, pushing the S&P 500 to its best week since November.

China's state-run Xinhua news agency said Washington and Beijing were making substantive progress on trade talks, providing relief after news that a summit to seal a deal between the two sides would not happen at March-end.

Chipmakers, which tend to derive a large portion of their revenue from China, rose. The Philadelphia SE chip index climbed 2.9 per cent while the S&P 500 technology index rose 1.2 per cent.

The Dow Jones Industrial Average rose 138.93 points, or 0.54 per cent, to 25,848.87, the S&P 500 gained 14 points, or 0.50 per cent, to 2,822.48 and the Nasdaq Composite added 57.62 points, or 0.76 per cent, to 7,688.53.

The S&P 500 posted its best weekly gain since the end of November and Nasdaq had its best weekly gain so far this year. For the week, the S&P 500 was up 2.9 per cent, the Nasdaq was up 3.8 per cent, and the Dow was up 1.6 per cent.

US data showed manufacturing output fell for a second straight month in February and factory activity in New York state was weaker than expected this month.

That followed a batch of weak data this week that lent support to the Federal Reserve's dovish stance on future interest rate hikes, which has helped to lift stocks this year.

Boeing closed up 1.5 per cent, lifting the Dow, after the world's largest planemaker said a software upgrade for the 737 MAX aircraft will be rolled out in the coming weeks.

Even so, Boeing's shares lost 10.3 per cent for the week. The company's 737 MAX jets were grounded globally following a fatal crash involving one of its planes in Ethiopia on Sunday.

Broadcom jumped 8.2 per cent and was among the biggest boosts to the S&P 500 and Nasdaq, after the company late on Thursday reported a quarterly profit that beat analysts' estimates.

Photoshop maker Adobe, which also reported results, fell 4 per cent after its current-quarter revenue forecast missed analysts' estimates.

Facebook shares were down 2.5 per cent after the social media giant said late on Thursday that chief product officer Chris Cox would be leaving the company.

The stock briefly added to losses and Google-parent Alphabet lost ground after the Washington Post reported that US state attorneys general are signalling they are willing to take action against those and other companies.

Qualcomm shares climbed 2.2 per cent after it won a legal victory against Apple, with a jury in federal court in San Diego finding that Apple owes Qualcomm about $US31 million for infringing three of its patents.

Volume on US exchanges was 10.8 billion shares, compared to the 7.5 billion average for the full session over the last 20 trading days.

is senior editor for Morningstar Australia

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