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Global Market Report - 17 June

Glenn Freeman  |  17 Jun 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open slightly higher, even after Wall Street closed lower on Friday amid continued nervousness over the US-China trade war.

The SPI200 futures contract was up 8 points, or 0.12 per cent, at 6,565 at 7am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Monday.

On Friday, the benchmark S&P/ASX200 index closed up 11.6 points, or 0.19 per cent, to 6,554 points, while the broader All Ordinaries was up 14.5 points, or 0.22 per cent, to 6,633.6.

For the week the ASX200 was up 110.1 points, or 1.71 per cent.

At the close on Friday, the Dow Jones index, S&P500 and tech-heavy Nasdaq Composite were down 0.07 per cent, 0.16 per cent and 0.5 per cent.

The Aussie dollar is buying 68.75 US cents, from 69.02 US cents on Friday.

Out today: New Zealand-MM consumer confidence for second-quarter 2019.

Asia

China stocks ended weaker on Friday, as investors kept a cautious stance ahead of data that was released after market hours, while U.S. tariff threats continued to weigh.

The Shanghai Composite index was down 1 per cent at at 2,881.97 points, but still ended up 1.9 per cent for the week. The blue-chip CSI300 index closed 0.8 per cent lower, but 2.5 per cent higher week-on-week.

The Hong Kong stock market fell for the third straight session on Friday, reducing some its weekly gains, as China reported lacklustre industrial production data.

Police kept a close watch over central Hong Kong on Friday as the Asian financial hub returned to normalcy, with banks re-opening branches closed during violent protests earlier in the week.

At market close, the Hang Seng index was down 0.7 per cent to 27,118.53, bringing to 0.6 per cent its weekly gains.

Share prices within the energy segment of the Hang Seng rose 0.2 per cent, while the IT, financial and property sectors dipped 1.4 per cent, 0.8 per cent and 0.3 per cent, respectively.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.5 per cent, while Japan’s Nikkei index rose 0.4 per cent to 21,116.89, after slipping into negative territory in early trade.

Japanese energy shares rallied after attacks on two oil tankers in the Gulf of Oman pushed crude oil prices sharply higher.

Sony Corp also was in the spotlight, with the stock ending 3.1 per cent higher after Daniel Loeb’s activist hedge fund Third Point LLC called on the company on Thursday to spin off its semiconductor business.

Europe

European shares on Friday were knocked by losses among trade-sensitive technology stocks, after US chipmaker Broadcom flagged declining sales and disappointing industrial data from China gave the clearest signs yet of the damage trade war may do to global growth.

The pan-European STOXX 600 index closed down 0.4 per cent, with Frankfurt’s DAX index, which lists Europe’s largest chipmaker Infineon, falling 0.6 per cent.

Broadcom blamed the trade war for the US$2 billion hit to its 2019 sales, along with the ban on doing business with Huawei.

European peers Infineon, AMS and STMicroelectronics, Siltronic, Dialog Semiconductor fell between 2.5 per cent and 5.5 per cent, pulled technology sector down 1.8 per cent.

However, the losses on Friday weren't sever enough to offset gains built across the full week on hopes monetary easing in Europe and the US would offset May's growth fears. The STOXX 600 was up 0.4 per cent across the week.

Mining and auto stocks which typically fall on trade concerns, fell about 0.9 per cent each.
Utilities, among sectors considered as bond-proxies, rose 0.5 per cent, helped by shares of National Grid, which was upgraded by Bernstein and France’s Rubis.

North America

US stocks ended lower on Friday, as investors cautiously await this week's Federal Reserve meeting on 18-19 June – a warning from chipmaker Broadcom on weakening global demand also weighed.

Broadcom shares fell 5.6 per cent after management cut its full-year revenue forecast by US$2 billion.

At the close on Friday, the Dow Jones index, S&P500 and tech-heavy Nasdaq Composite were down 0.07 per cent, 0.16 per cent and 0.5 per cent, respectively.

Some market commentators suggest a sell-off will ensue if the Fed fails to cut rates this week.

The S&P500 remained in positive territory over the full week – its second straight week of gains – and up 4.9 per cent in June, largely on hopes of a rate cut.

is senior editor for Morningstar Australia

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