Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Global Market Report - 21 May

Lewis Jackson  |  21 May 2021Text size  Decrease  Increase  |  
Email to Friend

Australia

Australian shares are set to rise following a rally on Wall St, driven by gains in tech stocks and positive jobs news.

The Australian SPI 200 futures contract was up 31 points, or 0.4  per cent, at 7046 points at 8.30am Sydney time on Friday, suggesting a positive start to trading.

Wall Street’s main indexes rebounded on Thursday after a three-day slide, buoyed by gains in technology stocks as the smallest weekly jobless claims since the start of a pandemic-driven recession lifted the mood.

The Dow Jones Industrial Average rose 188.11 points, or 0.55 per cent, to 34,084.15, the S&P 500 gained 43.44 points, or 1.06 per cent, to 4,159.12 and the Nasdaq Composite added 236.00 points, or 1.77 per cent, to 13,535.74.

Locally, Woolworths chief executive Brad Banducci has told the Australian Food and Grocery Council suppliers forum on Thursday that the company was coming under cost pressure from sources such as shipping. But he ranked consumer confidence as the most pressing issue for the retailer, The Australian reports.

Shares rebounded strongly on the Australian market on Thursday but talk of easing demand elsewhere may have made for a lacklustre showing from commodity stocks.

Technology shares were the stars on the ASX and gained 4.31 per cent.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

The biggest tech stock, Afterpay, gained 7.67 per cent to $93.10.

Financials gained almost 2 per cent. Commonwealth Bank shares rose 3.23 per cent to $98.40.

Property stocks were also serious improvers and increased by 2.58 per cent.

The benchmark S&P/ASX200 index closed up by 87.9 points, or 1.27 per cent, to 7019.6 only a day after its biggest loss since February.

The All Ordinaries on Thursday closed higher by 86.9 points, or 1.21 per cent, to 7252.6 points.

Gold was up 0.4 per cent to $US1876.73 an ounce; Brent oil was down 2.2 per cent at $US65.20 a barrel; Iron ore was down 2.0 per cent at $US211.85 a tonne.

Meanwhile, the Australian dollar was buying 77.74 US cents at 8.30am, up from 77.54 US cents at Thursday’s close.

Asia

China stocks ended mixed on Thursday, as gains in financial firms offset losses in resources companies after Beijing vowed to stabilise commodities prices.

The blue-chip CSI300 index rose 0.3 per cent, to 5,186.41, while the Shanghai Composite Index dipped 0.1 per cent to 3,506.94.

The CSI300 energy index and the CSI A-share resource industries index were among the worst performing sectors, closing down 3.2 per cent and 3.3 per cent, respectively.

Hong Kong stocks fell on Thursday, as energy and materials firms retreated after Beijing vowed to curb sky-high commodity prices by stabilising the market.

The Hang Seng index dropped 0.5 per cent to 28,450.29 points, while the Hong Kong China Enterprises Index lost 0.11 per cent to 10,642.80.

In Japan, the Nikkei 225 closed up 0.19 per cent.

Europe

European stocks rose on Thursday after one of the worst sell-offs this year as strong earnings and merger talks in the chip sector helped investors look past inflation worries.

The pan-European STOXX 600 index rose 1.3 per cent after suffering a 1.5 per cent loss in the previous session. Tech stocks gained 2.7 per cent to lead sectoral gains.

Oslo-listed chipmaker Nordic Semiconductor jumped 9.8 per cent to the top of STOXX 600 after an Italian daily reported that Franco-Italian rival STMicroelectronics is mulling an offer to buy the company.

But, Nordic Semiconductor’s chief financial officer said the firm had “no knowledge” of any takeover interest from STMicroelectronics.

A rally in economy-linked cyclical sectors on the back of reopening optimism and solid earnings drove the STOXX 600 to record high earlier this month, but inflation worries and a rise in market volatility put the index on course for weekly losses.

“Given we’re near a cyclical peak in the real economy and confidence indicators, we want to put some defensive names in order to hedge in what could be a more volatile phase in markets,” said Michele Morganti, Generali Investments’ senior equity strategist.

Wall Street’s main indexes also rose after a three-day slide, helped by gains in technology stocks, as the smallest weekly jobless claims since the start of a pandemic-driven recession bolstered risk appetite.

German producer prices posted their biggest increase in nearly a decade, in a further sign that supply bottlenecks are leading to increased inflation pressure in Europe’s largest economy.

However, Jack Allen-Reynolds, senior Europe economist at Capital Economics said: “once the temporary forces pushing up inflation fade, we expect it to drop back sharply to well below the ECB’s target.”

In earnings, French conglomerate Bouygues edged up 0.3 per cent after it raised the full-year guidance for its telecoms division and reported a smaller than expected first-quarter core loss.

Deutsche Telekom added 2.5 per cent on raising its medium-term core profit outlook.

Budget airline EasyJet fell 2.1 per cent after it warned that late announcement of travel rules reduced visibility as it reported a wider half-year loss.

UK rail operator Trainline slumped 23.3 per cent, marking its worst day on record, with traders pointing to hit from a reorganisation of Britain’s railway system.

North America

Wall Street’s main indexes rebounded on Thursday after a three-day slide, buoyed by gains in technology stocks as the smallest weekly jobless claims since the start of a pandemic-driven recession lifted the mood.

Bitcoin clawed back some lost ground to trade near $40,000 a day after a brutal sell-off, helping renew appetite for risk. Crypto-exchange operator Coinbase Global rose 3.83 per cent, while Crypto-miners Riot Blockchain and Marathon Digital Holdings gained 0.17 per cent and 0.83 per cent respectively.

“There’s a big risk, regulatory risk, to crypto that’s not fully appreciated,” said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. “The central banks have a monopoly on currency. And so we just think that it’s a little bit surprising they haven’t enforced that monopoly.”

The number of Americans filing for new claims for unemployment benefits fell to 444,000 in the week ended 15 May, down for the third straight time, suggesting job growth picked up this month, though companies still are desperate for workers.

Wall Street’s main indexes fell on Wednesday, extending losses since, after minutes from the Federal Reserve’s meeting last month indicated some policymakers thought it would be appropriate to discuss easing of crisis-era support, such as tapering bond purchases, in upcoming meetings if the strong economic momentum is sustained.

“Right now really there is just one driver of the market, and that is the Fed and potential timing of tapering and quantitative easing,” Hatfield added.

Signs of rising inflation have increased bets that the Federal Reserve may tighten its policy soon, hitting rate-sensitive growth stocks that set the tech-heavy Nasdaq on track for its fifth consecutive weekly drop.

The Dow Jones Industrial Average rose 188.11 points, or 0.55 per cent, to 34,084.15, the S&P 500 gained 43.44 points, or 1.06 per cent, to 4,159.12 and the Nasdaq Composite added 236.00 points, or 1.77 per cent, to 13,535.74.

Volume on US exchanges was 9.30 billion shares, compared with the 10.05 billion average for the full session over the last 20 trading days. Retailers were a weak spot. Ralph Lauren Corp dropped 7.01 per cent after it forecast full-year sales below analysts’ estimates, making it the largest percentage decliner on the S&P 500

Kohl’s Corp slumped 10.17 per cent after warning of a hit to its full-year profit margin from higher labour and shipping costs, as well as selling fewer products at full price.

With Reuters

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

AAP logo

© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend