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Global Market Report - 18 April

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

The Australian share market is set for a subdued open as healthcare stocks weigh on Wall Street, with local jobs data also on the way.

At 7.15am Sydney time the SPI200 futures contract was up 10 points, suggesting a mildly positive open for the benchmark S&P/ASX200.

The Australian share market closed lower yesterday, dragged down by the mining giants and health care stocks.

The benchmark S&P/ASX200 index was down 21 points, or 0.33 per cent, to 6,256.4 points, while the broader All Ordinaries fell 22 points, or 0.35 per cent, to 6,350.3.

US stocks dipped as healthcare shares overshadowed other positive corporate earnings and upbeat data from the US and China.

The Australian Bureau of Statistics is scheduled to reveal at 11.30am whether the unemployment rate for March shifted from February’s eight-year low of 4.9 per cent.

The Aussie dollar is buying US71.80 cents from US71.97 cents yesterday.

Out today: Labour force data for March; unemployment rate; employment participation rate.

Asia

The Shanghai Composite finished up 9.52 points, or 0.29 per cent, at 3263.12.

In Hong Kong, the Hang Seng Index finished flat, down 5.19 points, or 0.02 per cent, at 30,124.68.

China’s industrial output surged 8.5 per cent in March from a year earlier, the fastest pace since July 2014 and well above forecasts of a 5.9 per cent increase. Retail sales also pleased, with a rise of 8.7 per cent.

Japan’s Nikkei advanced to a 4½-month high on Wednesday as automakers rallied on hopes of progress in Japan-US trade talks, while companies with large exposure to China gained on upbeat Chinese economic data.

The Nikkei share average ended up 0.3 per cent at 22,277.97, its highest closing level since early December.

Europe

European stock markets mostly rose as strong data from the world’s two top economies sparked fresh hope for the growth outlook.

US numbers released before Wall Street’s opening bell showed that the trade deficit in February fell to its lowest level in eight months, thanks in part to rising aircraft and auto exports, according to government data.

Eurozone stock markets were firmly in positive territory at the close, while London lagged its peers as the pound strengthened.

London closed flat, Frankfurt rose 0.4 per cent and Paris ended up 0.6 per cent.

Among individual stocks, shares in Italian club Juventus fell more than 17 per cent in late Milan trading after Cristiano Ronaldo’s side were knocked out of the Champions League quarter-finals by Ajax.

Elsewhere, oil prices managed to extend gains after a US industry group reported a surprise drop in stockpiles, while OPEC-led output cuts and US sanctions on Iran and Venezuela kept a supply glut in check.

North America

US stocks ended slightly lower on Wednesday as a drop in healthcare shares overshadowed a string of positive corporate earnings and upbeat economic data from the US and China.

All three major US stock indexes ended the session in negative territory, with the S&P 500 remaining just within a percent below its record high reached in September.

The healthcare sector saw its biggest percentage drop in four months, falling 2.9 per cent on regulatory worries.

UnitedHealth Group Inc, Pfizer Inc, Merck & Co Inc and Abbott Laboratories all closed down between 1.9 per cent and 4.7 per cent, and were among the biggest drags on the broader S&P 500.

The sector’s drop dampened generally encouraging earnings reports.

Morgan Stanley rose 2.6 per cent after beating analyst estimates due to cost-cutting and growth in its wealth management segment.

United Continental Holdings jumped 4.7 per cent following Tuesday’s after-market earnings report, where the airline bested consensus estimates and held its 2019 profit target firm, even as Boeing Co’s 737 MAX jets remain grounded.

Robust business jet demand drove Textron’s earnings beat, driving its stock up 4.0 per cent.
PepsiCo reported better-than-expected first-quarter sales on strong North American demand. The packaged food company’s shares rose 3.8 per cent.

With reporting season in high gear, analysts now expect Jan-March S&P 500 profits to have dropped 1.8 per cent year-on-year, according to Refinitiv data, which would mark the first earnings decline since 2016.

Of the 54 S&P 500 companies that have posted thus far, 79.6 per cent have beaten consensus, compared with the 65 per cent average beat rate going back to 1994.

The Dow Jones Industrial Average fell 3.12 points, or 0.01 per cent, to 26,449.54, the S&P 500 lost 6.61 points, or 0.23 per cent, to 2,900.45 and the Nasdaq Composite dropped 4.15 points, or 0.05 per cent, to 7,996.08.

Of the 11 major sectors in the S&P 500, six ended the session in the black.

Qualcomm surged 12.2 per cent after the chipmaker settled its long-running legal battle with Apple Inc. Apple shares climbed 1.9 per cent.

The news boosted other chipmakers, with the Philadelphia SE Semiconductor index advancing 1.6 per cent.

On the economic front, the US trade deficit dropped to an eight-month low in February due to a 20.2 per cent plunge in imports from China.

China, meanwhile, saw its first-quarter GDP grow at a better-than-expected 6.4 per cent annual rate.

 

is content editor for Morningstar Australia

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