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Global Market Report - 21 February

Lex Hall  |  21 Feb 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open higher after Wall Street rose on the Fed's minutes while local investors await another day of earnings results.

The SPI200 futures contract was up 11 points, or 0.18 per cent, at 6,071.0 at 7am Sydney time, suggesting a positive start for the benchmark S&P/ASX200 on Thursday. Yesterday, the ASX closed in negative territory as gains by miners failed to outweigh losses from the consumer sector.

The benchmark S&P/ASX200 index closed down 10.4 points, or 0.17 per cent, at 6096.5 points at 4.15pm on Wednesday, while the broader All Ordinaries was down 8.4 points, or 0.14 per cent, at 6175.8.

On Wall Street overnight, the Dow Jones Industrial Average was down 0.24 per cent, the S&P 500 was down 0.18 per cent and the Nasdaq Composite was down 0.03 per cent.

The Aussie dollar is buying 71.71 US cents from 71.64 US cents on Wednesday.
Australia's biggest coal producer will cap production of the valuable commodity to help reduce global greenhouse gas emissions after being lobbied by a powerful anti-coal group.

Switzerland-based Glencore, which is also one of the world's biggest miners, reaffirmed and extended its commitment to supporting a global push to a low carbon economy in a statement.

Qantas Airways has announced a 19 per cent fall in its first-half underlying profit to $780 million. Net profit was also down, by 16 per cent to $498 million.

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Wesfarmers will hand more than $1 billion of the cash it raised by demerging Coles and selling other assets back to shareholders in the form of a special dividend. The company’s first-half profit soared to $5.4 billion from $212 million in the prior corresponding period.

Other companies set to report earnings today: Sydney Airport, Qube, Ausdrill, Webjet, Santos, Origin, Coca-Cola Amatil, Nine, MYOB, Flight Centre among others.

ASIA

Asian markets finished broadly higher today with shares in Hong Kong leading the region. The Hang Seng is up 1.01 per cent while China's Shanghai Composite is up 0.20 per cent.

Shares of China International Capital Corporation rose 5.8 per cent after Alibaba, the world’s largest e-commerce platform, raised its stake to 11.7 per cent from 5 per cent to become the third-biggest shareholder in the investment bank.

Japan's Nikkei 225 is up 0.60 per cent

EUROPE

European markets finished higher today with shares in Germany leading the region.
The DAX is up 0.82 per cent while London's FTSE 100 is up 0.69 per cent and France's CAC 40 is up 0.69 per cent.

Trade talks between the world’s two biggest economies helped European shares rise on Wednesday, while the threat of a blocked merger sank shares in British supermarket Sainsbury’s and a money laundering scandal hit Swedbank.

Germany's trade-sensitive DAX led the way with a 0.8 per cent gain and the pan-European STOXX 600 rose 0.7 per cent after US President Donald Trump said on Tuesday that trade talks with China were going well.

Although autos, which are vulnerable to rising protectionism, jumped 2.4 per cent but there were still reasons for investors to remain cautious.

British supermarket chain Sainsbury's and Swedish lender Swedbank marred the positive picture overall.

Sainsbury's shares sank 18.5 per cent after Britain's competition regulator said its merger with Asda should either be blocked or need significant concessions.

NORTH AMERICA

US stocks ended higher on Wednesday as the release of the Federal Reserve's minutes from its January meeting showed policymakers thought pausing on US interest rate hikes posed little risk.

The minutes also showed many participants were not yet clear what adjustments to rates might be needed later this year.

The US central bank surprised markets last month by suspending a three-year campaign to raise rates, saying it would be patient about making any adjustments to its target range for short-term interest rates, now at between 2.25 per cent and 2.5 per cent.

A dovish Fed and progress in US-China trade negotiations have helped the S&P 500 rise about 18 per cent from its lows in December, when the market swooned on fears of an economic slowdown. The index is trading about 5 percent below the record closing high it hit in late September.

The S&P materials index rose 1.9 percent, leading percentage gains among the major 11 S&P sectors, boosted by CF Industries Holdings, Mosaic Co and FreeportMcMoran.

Investors also took in more news on the trade front, with President Donald Trump on Wednesday saying the US would impose tariffs on European car imports if it cannot reach a trade deal with the European Union.

The Dow Jones Industrial Average rose 63.12 points, or 0.24 percent, to 25,954.44, the S&P 500 gained 4.94 points, or 0.18 per cent, to 2,784.7, and the Nasdaq Composite added 2.30 points, or 0.03 per cent, to 7,489.07.

is senior editor for Morningstar Australia

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