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Global Market Report - 19 April

Lewis Jackson  |  19 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are poised to extend last week’s advance, on the strength of positive earnings and data from overseas.

ASX futures were up 37 points or 0.5 per cent to 7,071 suggesting a positive start to trading.

The S&P 500 and the blue-chip Dow Jones Industrial Average recorded their fourth straight week of gains, while the technology-heavy Nasdaq finished less than one percent below its own all-time closing high achieved on 12 February.

Unofficially, the Dow Jones Industrial Average rose 159.31 points, or 0.47 per cent, to 34,195.3, the S&P 500 gained 14.39 points, or 0.35 per cent, to 4,184.81 and the Nasdaq Composite added 11.07 points, or 0.08 per cent, to 14,049.84.

Locally, the S&P/ASX200 index closed Friday higher by 4.9 points, or 0.07 per cent, to 7,063.5, and is within 100 points of its record close.

The record close was in February last year, days before investors sold stocks due to fear of the coronavirus.

The All Ordinaries on Friday closed up 8.3 points, or 0.11 per cent, to 7,325.8 points and within six points of its record high.

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On the ASX, the biggest gain was in property, 1.52 per cent. Energy stocks lost 1.48 per cent.

James Packer's influence at Crown Resorts will be reduced under a deal struck to win a casino licence.

Mr Packer's Consolidated Press Holdings agreed to give up board seats at Crown until 2024, under a deal with a NSW regulator.

Shares were up 0.17 per cent to $11.92.

On Tuesday, Rio Tinto is due to provide details of its first quarter trade.

On Wednesday, BHP will give its third quarter update.

Thursday will include AMP and Woodside detailing first quarter progress.

Gold was up 0.6 per cent at $US1,775.20 an ounce; Brent crude was down 0.3 per cent to $US66.74 a barrel; Iron ore was up 2 cents to $US178.43 a tonne.

Meanwhile, the Australian dollar was buying 77.34 US cents at 7:00am, down from 77.56 this time Friday.

Asia

China stocks ended higher on Friday, as investors cheered robust GDP growth recorded in the first quarter, though lingering worries over policy tightening by Beijing pushed equities to post a weekly loss.

The blue-chip CSI300 index ended up 0.4 per cent at 4,966.18, while the Shanghai Composite Index added 0.8 per cent to 3,426.62.

The country’s GDP jumped a record 18.3 per cent in the first quarter from a year earlier, official data showed on Friday, slower than the 19 per cent forecast by economists in a Reuters poll, and following 6.5 per cent growth in the fourth quarter last year.

Though stocks lost ground for the week on persistent worries that recent upbeat economic data could reinforce Beijing’s policy tightening bias, even as Beijing had pledged no sudden policy shift. The CSI300 dropped 1.4 per cent, while SSEC slipped 0.7 per cent.

At the close of trade, the Hang Seng index was up 176.57 points or 0.61 per cent at 28,969.71. The Hang Seng China Enterprises index rose 1.12 per cent to 11,027.51.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.47 per cent, while Japan’s Nikkei index closed up 0.14 per cent.

Europe

European stocks ended at a record high on Friday, marking its seventh straight week of gains, after strong U.S. and China economic data spurred optimism about a speedy global recovery, while upbeat results from Germany’s Daimler boosted carmakers.

The pan-European STOXX 600 index rose 0.8 per cent. Leading regional peers, Germany’s DAX gained 1.3 per cent to hit an all-time high, while UK’s FTSE 100 was up 0.5 per cent, closing at over one-year highs.

Analysts expect profit for STOXX 600 companies to jump more than 55 per cent in the first quarter after a slide of nearly 40 per cent in the same quarter last year, according to Refinitiv IBES data.

Meanwhile, a Reuters poll of economists showed the euro zone economy will recover at a much weaker rate this quarter than expected only a month earlier, with a slower vaccine rollout among the biggest risks. Fitch on Friday said it could take at least a decade for Italy’s debt-to-GDP ratio to return to its pre-COVID-19 level.

Next week, eyes will be on the European Central Bank meeting on Thursday.

“The ECB will look through any temporary increases in headline inflation and will not accept any increases in bond yields unless they are the result of improved growth prospects,” ING said in a note.

North America

The three main Wall Street indexes ended Friday higher for the day and week, with the S&P 500 and the Dow breaking closing records, as investors took strong economic data and bank earnings as signs of momentum in the US pandemic rebound.

Unofficially, the Dow Jones Industrial Average rose 159.31 points, or 0.47 per cent, to 34,195.3, the S&P 500 gained 14.39 points, or 0.35 per cent, to 4,184.81 and the Nasdaq Composite added 11.07 points, or 0.08 per cent, to 14,049.84.

Investor confidence on the road ahead seems steady, with the volatility index, Wall Street’s fear gauge, falling on Friday and on course for its lowest close in 14 months.

The Federal Reserve’s pledge to keep interest rates low despite higher inflation has also revived demand for richly valued technology stocks, although bond yields edged higher again on Friday after hitting multi-week lows a day earlier.

Tech behemoth Apple Inc slipped. It has been among the stocks which led Wall Street’s recovery last year from the coronavirus-fueled crash.

Bitcoin-related stocks including Riot Blockchain and Marathon Digital slumped after Turkey banned the use of cryptocurrencies and crypto assets to purchase goods and services.

With Reuters

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email at: editorialAU@morningstar.com

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