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Global Market Report - 17 April

Lex Hall  |  17 Apr 2020Text size  Decrease  Increase  |  
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The Australian share market is expected to eke out early gains after tech giants Amazon and Netflix helped Wall Street higher amid new shutdown orders.

The SPI200 futures contract was up 8.0 points, or 0.15 per cent, at 5,431.0 points at 8am Sydney time on Friday, suggesting local stocks will edge higher when the final session of the week gets under way.

New stay-at-home orders in New York helped boost Amazon.com by 4.4 per cent and Netflix by 2.9 per cent as people turn to online streaming services and home delivery of goods.

Investors remain on edge, however, as a likely bleak US quarterly earnings season looms.

The Nasdaq Composite added 139.19 points, or 1.66 per cent, to 8,532.36, the Dow Jones Industrial Average rose 33.33 points, or 0.14 per cent, to 23,537.68, and the S&P 500 gained 16.19 points, or 0.58 per cent, to 2,799.55.

The UK also extended its lockdown period to May.

The S&P/ASX200 benchmark index finished Thursday down 50.4 points, or 0.92 per cent, at 5416.3 points, having earlier been down by as much as 2.2 per cent.

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All sectors but consumer staples, health care and telecom closed lower, with consumer discretionaries down the most, 2.1 per cent.

Oil prices were mixed overnight while gold eased after US jobless claims rose less than a week ago.

The Australian dollar was buying 63.56 US cents at 8am, up from 63.02 US cents at the close of markets on Thursday.


China stocks ended higher on Thursday on recovering global investor sentiment, but gains were modest ahead of March-quarter GDP data that is expected to show an economic contraction for the first time in nearly 30 years.

The Shanghai Composite index closed up 0.3 per cent at 2,819.94, while the blue-chip CSI300 index gained 0.1 per cent, having moved in and out of negative territory.

CSI300’s financial sector sub-index was higher by 0.1 per cent, the consumer staples sector was down 0.3 per cent and the healthcare sub-index edged up 0.4 per cent.

The smaller Shenzhen index added 0.5 per cent and the start-up board ChiNext Composite index gained by 1.6 per cent.

The Hong Kong stock market drifted to its lowest level in over a week as worries about the coronavirus outbreak’s economic impact weighed, ahead of China’s first-quarter GDP data that is likely to be the worst in nearly three decades.

The Hang Seng index closed down 0.6 per cent at 24,006.45, after hitting its lowest level since 7 April earlier in the session. The Hang Seng China Enterprises index fell 0.5 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.4 per cent, paring losses from earlier in the day, while Japan’s Nikkei index closed down 1.3 per cent.


European shares rose on Thursday as daily coronavirus death tolls in Spain and Italy eased, adding to signs the pandemic was plateauing.

The pan-European STOXX 600 index added 0.6 per cent, climbing for the sixth time in seven days.

Gains were driven by technology, autos and financial stocks, while the healthcare sector gained 2.8 per cent, powered by a 10 per cent jump in Danish food ingredients maker Chr. Hansen.

The company said it had not seen a negative impact from the coronavirus but rather a short-term boost in demand as consumers opt for at-home consumption such as frozen pizzas and probiotics for immune system support.

“Today’s moves are mostly driven by hope and markets are eager to hear any news about lockdown exit strategies and the re-opening of economies,” said Stefan Koopman, senior market economist at Rabobank.

The benchmark STOXX 600 has risen to near one-month highs since hitting a trough in March with central banks announcing a raft of stimulus measures, but analysts have warned about another sell-off with economic damage piling up and GDP estimates slashed.

Latest data showed US jobless claims fell slightly to 5.2 million last week from an upwardly revised 6.62 million the week before, but the total figure for the past month still topped 20 million.

US President Donald Trump is also expected to announce “new guidelines” for re-opening the economy on Thursday as he said data suggested the country had passed the peak on new coronavirus infections.

In Europe, analysts expect a corporate recession to deepen in 2020, with earnings for STOXX 600 companies falling 22 per cent in the first quarter and 34.2 per cent in the second, according to IBES data from Refinitiv.

French state-controlled utility EDF fell 5.8 per cent after it forecast a sharp drop in its domestic nuclear power output due to a fall in business activity caused by the health crisis.

But German online fashion retailer Zalando jumped 6.2 per cent as it said it was optimistic about the second quarter after sales picked up in April.

North America

US stocks rose on Thursday as Amazon.com and Netflix Inc surged to record highs, although trading was choppy as investors worried about the impact of the coronavirus pandemic on first-quarter earnings.

Amazon.com rose 4.4 per cent and Netflix climbed 2.9 per cent as sweeping stay-at-home orders drove demand for online streaming services and home delivery of goods.

The shutdown in New York was extended until 15 May, even as coronavirus-related hospitalisations and deaths fell to their lowest in more than a week, adding to evidence that the hardest-hit state was controlling the virus’ spread.

Still, the impact of the health crisis on the economy and companies kept investors on edge. First-quarter earnings kicked off this week, with US banks preparing for a wave of future loan defaults following a halt in business activity.

Analysts estimate earnings for S&P 500 companies slumped 12.8 per cent in the quarter, which would be the biggest year-over-year quarterly decline since the financial crisis.

The Dow Jones Industrial Average rose 33.33 points, or 0.14 per cent, to 23,537.68, the S&P 500 gained 16.19 points, or 0.58 per cent, to 2799.55 and the Nasdaq Composite added 139.19 points, or 1.66 per cent, to 8532.36.

Data showed jobless claims fell slightly to 5.2 million last week from an upwardly revised 6.62 million the previous week. But the total figure for the past month still topped a stunning 20 million.

Economists polled by Reuters had estimated 5.1 million jobless claims for the week ended 11 April.

Morgan Stanley wrapped up earnings for the big US lenders, reporting a plunge in quarterly profit as its advisory and wealth management businesses took a hit from the economic fallout of the pandemic. Its shares ended down slightly.

Shares of Boeing Co fell 8 per cent, limiting gains in the Dow, as its European rival Airbus said it was examining requests to defer deliveries after a collapse in travel demand.

is senior editor for Morningstar Australia

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