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 October

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

Australia

The ASX is set to open higher after the S&P 500 put on a sixth straight day of gains.

The Australian SPI 200 futures contract was up 12 points or 0.16 per cent at 7,396 near 7.15 am AEST on Thursday, suggesting a positive start to trading.

US stocks rose Wednesday, with the S&P 500 and Dow Jones Industrial Average stopping just short of fresh record highs. Investors are parsing corporate results for fresh insight into the effects of inflation and supply-chain disruptions.

The S&P 500 added 0.4%, a sixth straight session of gains, as the Dow picked up 0.4%. Both were just below records. The tech-heavy Nasdaq Composite Index, however, slipped less than 0.1%.

The Australian dollar was buying 75.17 US cents near 7.00am AEST, up from the previous close of 74.74. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, fell to 88.01.

Locally, the S&P/ASX 200 closed 0.5% higher at 7413.7, led by solid gains among heavyweight banking stocks. The index built on a positive lead by US stocks to bounce from a 0.1% slip in the prior session.

The financial sector, which represents almost 30% of the ASX 200's market capitalization, put on 1.0%. NAB, Westpac, ANZ and Commonwealth bank gained between 0.6% and 1.1% as JPMorgan said swap rate moves were improving the outlook for lender margins.

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

WiseTech, Xero and Afterpay rose between 0.8% and 1.6% as the tech sector took its gains to 7.6% over the past six sessions.

Rio Tinto announced it was upping its targets for emissions reductions and would invest $7.5 billion between 2022 and 2030 decarbonising its assets.

Gold futures rose 0.8% to $US1785.60 an ounce; Brent crude rose 0.8% to $US85.77 a barrel; Iron ore was flat at US$124.07.

The yield on the Australian 10-year bond rose to 1.80%; The US 10-year Treasury note rose to 1.65.

Asia

Chinese stocks ended the session lower Wednesday, snapping a short-lived recovery on Tuesday. The benchmark Shanghai Composite Index shed 0.2%. Declines were mainly driven by losses in the coal mining industry, after Beijing summoned key companies in the sector to discuss price control measures.

Hong Kong shares ended the session higher, extending a winning streak for the fourth consecutive trading day. The benchmark Hang Seng Index rose 1.4%. Gains were led by Alibaba shares. Its online healthcare business Alibaba Health Information jumped 13%, while Alibaba surged 6.7%, partly driven by the launch of a new in-house chip.

Japanese stocks ended higher, led by gains in railway and airline stocks, thanks to continued hopes for economic reopening and an earnings recovery after the worst of the Covid-19 pandemic. The Nikkei Stock Average rose 0.1%.

Europe

European stocks rose Wednesday as investors reacted to a batch of corporate earnings. The pan-European STOXX 600 index, which tracks the performance of companies across 17 European companies, rose 0.3%.

"By and large companies are reporting decent numbers with an ability to pass on rising costs, without a significant impact on their sales growth numbers," CMC Markets analyst Michael Hewson says. While that's encouraging, most of this ability to pass on these costs predates the recent surge in energy prices, he says.

In London, the FTSE 100 was 0.1% higher.

North America

US stocks rose Wednesday, with the S&P 500 and Dow Jones Industrial Average stopping just short of fresh record highs.

The S&P 500 added 0.4%, a sixth straight session of gains, as of 4 p.m. ET, and the Dow picked up 0.4%, or 152 points, to 35609. Both were just below records. The tech-heavy Nasdaq Composite Index, however, slipped less than 0.1%.

Investors are parsing corporate results for fresh insight into the effects of inflation and supply-chain disruptions. Shares of Verizon climbed 2.4% after the telecommunications giant raised its full-year outlook. Biogen fell 0.2% after the pharmaceutical company increased its full-year sales and earnings guidance.

Stocks have gained in recent days on strong earnings reports. Problems like labor shortages and higher prices for raw materials haven't eaten much into profits.

That's giving investors reason to look past supply-chain issues and seize on the strength of these corporations, said Carol Schleif, the deputy chief investment officer for BMO Family Office. What the numbers show, she said, is the resiliency of companies despite the unprecedented demands of the past year and a half. "It's not something we step back and celebrate very often," she said.

For tech companies in particular, investors will be watching for an update on the global chip shortage and the ability of large firms to raise prices on consumers, said Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.

"Earnings are very good so far across a pretty broad range" of companies, Mr. Ganesh said. Investors are looking for signs of margin pressure and worries about input costs but "we haven't really seen too much concern" so far, he added.

Netflix shares slipped 2.3%. The company said it added more new users than expected in the last quarter, but its co-chief executive also apologized for defending a controversial comedy special by Dave Chappelle.

Novavax fell 17% after a report that the pharmaceutical company was running into difficulties manufacturing a Covid-19 vaccine that met regulators' quality standards.

Bitcoin hit a new all-time record, trading as high as $66,975, according to CoinDesk. The cryptocurrency has climbed more than 50% this month. The first bitcoin futures exchange-traded fund began trading Tuesday.

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