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Global Market Report - 21 January

Lex Hall  |  21 Jan 2020Text size  Decrease  Increase  |  
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Australia

The Australian market looks set to open flat after a five-day bull run with no firm offshore leads due to a holiday in the US.

The SPI200 futures contract was up 5 points, or 0.07 per cent, at 7,031 at 8am Sydney time on Tuesday.

The pause amid quiet global trade, due to a US public holiday on Monday, follows five consecutive local trading days of record gains.

Local news will be the ANZ-Roy Morgan Australian Consumer Confidence survey and BHP's first half operational review.

The S&P/ASX200 index finished Monday up 15.4 points, or 0.22 per cent, at 7,079.5 points after reaching a new high of 7092.5 in morning trade.

The broader All Ordinaries gained 16 points, or 0.22 per cent, to 7,196.3 on Monday.

The Australian dollar was buying 68.75 cents at 8am on Tuesday.

Asia

China stocks closed higher on Monday following signs that the economy may be stabilizing, and as hopes rose for more stimulus measures to aid growth.

The blue-chip CSI300 index ended 0.8 per cent higher at 4,185.83, while the Shanghai Composite Index closed up 0.7 per cent at 3,095.79.

Hong Kong shares fell on Monday, led by consumer stocks, reflecting pessimism toward the local economy as the city’s tourism industry reels under the impact of prolonged anti-government protests. 

Contributing to the sluggishness in the market, some investors unwound positions ahead of the Lunar Chinese New Year holiday later this week, traders said. The Hang Seng index fell 0.9 per cent to 28,795.91, while the China Enterprises Index lost 0.8 per cent to 11,331.49 points.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.22 per cent, while Japan’s Nikkei index closed up 0.18 per cent.

Europe

European shares retreated from recent peaks on Monday as investors paused before launching into a week packed with economic data and the European Central Bank’s first policy meeting of the year.

The pan-European STOXX 600 index was down about 0.1 per cent, after ending at a record high on Friday on optimism around US-EU trade talks. Market activity was thin because of a holiday in the US.

The benchmark European index has risen about 2 per cent so far this month, as investors bet on a recovery in global growth amid cooling US-China trade tensions.

Markets will also be watching for the Purchasing Manager’s Index (PMI) from the euro zone on Friday, with a recent Reuters poll showing that economists expect a slowdown in the bloc to have bottomed out in 2019.

Comments from ECB Chief Christine Lagarde at the central bank’s first policy meeting for the year on Thursday will also be a point of interest. The bank is expected to keep the deposit rate unchanged after cutting it in September for the first time since 2016.

For the day, the retail subindex was the worst performing sector, with Switzerland’s Dufry AG leading losses with a 4.5 per cent drop.

Air France dropped to the bottom of the STOXX 600 after Davy Research downgraded the stock citing short-term pressures from its restructuring.

German stocks bucked the trend, rising about 0.2 per cent on strength in financials. Electronic payments service provider Wirecard was the biggest percentage gainer on the DAX.

North America

Trading in the US halted for the Martin Luther King Jr holiday.

is content editor for Morningstar Australia

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