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Global Market Report - 18 November

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

The Australian share market is expected to open little changed despite a positive lead from Wall Street at the end of last week.

The SPI200 futures contract was down 3.0 points, or 0.04 per cent, at 6,794.0 at 8am Sydney time, suggesting a steady start for the benchmark S&P/ASX200 on Monday.

The Australian share market has hit its highest level since late July, with gains across the board as traders bet that the country's sluggish economy will lead to another cut in the official cash rate.

The benchmark S&P/ASX200 index closed up 58.6 points, or 0.87 per cent, to 6,793.7 points, while the broader All Ordinaries was up 58.1 points, or 0.85 per cent, to 6,898.9 points.

On Wall Street on Friday, the Dow Jones Industrial Average finished up 0.80 per cent, the S&P 500 was up 0.77 per cent and the tech-heavy Nasdaq Composite was up 0.73 per cent.

The Aussie dollar is buying 68.16 US cents from 67.92 US cents on Friday.

Asia

China stocks fell on Friday to end the week lower, with the country’s blue-chip index posting its biggest weekly decline in more than three months, amid uncertainty around the Sino-US trade deal while investors sought more clues on Beijing’s policy support in the midst of a slowing economy.

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The blue-chip CSI300 index fell 0.7 per cent, to 3,877.09, while the Shanghai Composite Index ended down 0.6 per cent at 2,891.34 points.

Hong Kong stocks gave back earlier gains to end flat on Friday, posting their worst week in more than three months, on concerns over the persistent political unrest and uncertainty around Sino-US trade deal.

The Hang Seng index was unchanged at 26,326.66, while the China Enterprises Index was flat at 10,424.80 points.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.59 per cent, while Japan’s Nikkei index closed up 0.7 per cent.

Europe

European shares clocked a sixth-straight week of gains on Friday following record highs on Wall Street after bullish comments from a White House official on US-China trade talks.

The pan-European STOXX 600 index rose 0.4 per cent, close to four-year highs it hit last week, with most sectors ending in the black.

White House economic adviser Larry Kudlow said late on Thursday Washington and Beijing were getting close to a trade agreement, citing what he called very constructive talks with Beijing about ending a 16-month trade war.

European indices that see-sawed throughout the week on conflicting trade headlines, glum economic indicators, mixed corporate outlook and some rocky Spanish politics, managed to end the week marginally higher.

Trade-sensitive commodity-linked and technology stocks led gains on the day, while defensive plays like utilities and telecom lagged.

Chipmakers Infineon, STMicroelectronics and ASML Holding were all up on industry bellwether Applied Materials’ upbeat forecast for the first quarter in 2020.

A.P. Moller-Maersk was the biggest climber in the STOXX 600 index after the world’s biggest container shipping firm said that despite an uncertain economic outlook, a focus on driving down costs put it on track to improve its profit margin.

A handful of disappointments among stocks listed in the Nordic region kept overall gains in check.

Swedish human care equipment maker Elekta dropped 11 per cent after slashing its full-year outlook, while SEB sank 12 per cent after the lender said it had been informed a broadcaster would air a program on suspected money laundering that would include information concerning the bank.

Those falls flattened the Stockholm index, while Norwegian shares fell 0.4 per cent, hit by salmon producers Mowi and SalMar after the companies said the US Department of Justice had issued subpoenas.

News that Britain's opposition Labour Party would nationalise parts of the telecoms provider BT's network if it won power in the 12 December election, hit other telecom peers and capped gains for the FTSE.

BT shares slid 1 per cent, while Vodafone dropped and TalkTalk fell 3 per cent each.

North America

Wall Street's main stock indexes have closed at record levels, fuelled by fresh optimism over a potential calming of US-China trade tensions and by big gains in shares of healthcare companies.

White House economic adviser Larry Kudlow said late on Thursday that the US and China are getting close to a trade agreement, citing what he called very constructive talks with Beijing.

The stock market has climbed recently to record highs, driven by Federal Reserve interest rate cuts, third-quarter earnings topping low expectations and signs that economic growth may be bottoming, while uncertainty over US-China trade relations remains a wild card.

The Dow Jones Industrial Average rose 222.93 points, or 0.8 per cent, to 28,004.89, the S&P 500 gained 23.83 points, or 0.77 per cent, to 3,120.46 and the Nasdaq Composite added 61.81 points, or 0.73 per cent, to 8,540.83.All three indexes hit all-time highs during the session.

Healthcare led the way among the S&P 500 sectors, gaining 1.5 per cent, helped by increases for Johnson & Johnson and Pfizer. All 11 sectors were in positive territory.

Shares of Applied Materials soared 9.0 per cent after the chip gear maker forecast first-quarter revenue and profit above Wall Street estimates.

The Philadelphia SE Semiconductor index gained 1.1 per cent and hit a record high. Enthusiasm for the group was tempered by a 2.0 per cent decline in Nvidia shares following the chipmaker's report.

Data on Friday showed US retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season.

is senior editor for Morningstar Australia

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