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Global Market Report - 22 April

Lewis Jackson  |  22 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to rebound and snap a two-day losing skid as global equities rallied both in Europe and the US.

The Australian SPI 200 futures contract was up 37 points or 0.5 per cent to 7,006 at 7am Sydney time on Thursday, suggesting a positive start to trading.

Wall Street rebounded on Wednesday after a two-day decline in a broad rally as a tilt toward stocks poised to benefit from a recovering economy offset Netflix Inc's sell-off after its disappointing results a day earlier.

The Nasdaq Composite added 1.19 per cent to 13,950.22. The Dow Jones Industrial Average rose 0.93 per cent to 34,137.31, while the S&P 500 gained 0.93 per cent at 4,173.42.

Locally, Australia's share market closed Wednesday below 7,000 points for the first time in a week after coronavirus infections worried investors, but a second-half rally gave hope for Thursday.

The benchmark S&P/ASX200 index closed down 20.4 points, or 0.29 per cent, to 6,997.4.

The All Ordinaries closed lower by 23.3 points, or 0.32 per cent, to 7,258.8 points.

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India reported its highest daily death toll (1,761), while Canada and the United States extended a land-border closure for non-essential travellers.

Yet an ASX second-half rally, particularly in industrials, health and materials shares, trimmed losses.

The price of the steel-making commodity was trading at about $US190 ($246) per tonne, and was the bright side to BHP's report that first-quarter output dipped.

Health shares were best and gained more than one per cent.

Market heavyweight CSL closed up 1.52 per cent to $267.95.

Energy and information technology were the worst hit shares.

In banking, the ANZ fell 0.84 per cent to $28.42, the Commonwealth was higher by 0.49 per cent to $88.17, NAB lost 1.09 per cent to $26.21 and Westpac fell 1.03 per cent to $24.98.

On Thursday, wealth manager AMP and energy provider Woodside will give first quarter updates.

Gold was up 0.9 per cent at $US1,793.96 an ounce; Brent crude was down 2.2 per cent to $US65.14 a barrel; Iron ore was down 0.7 per cent to $US188.23 a tonne.

Meanwhile, the Australian dollar was buying 77.54 US cents at 7:00am, up from 77.25 this time Wednesday.

Asia

China shares ended higher on Wednesday with healthcare and banking stocks leading the gains, following upbeat quarterly earnings reports.

The Shanghai Composite index closed flat at 3,472.93, while the blue-chip CSI300 index was up 0.3 per cent.

The blue-chip’s banking sector sub-index was higher by 1.79 per cent, and the healthcare sub-index up 2.19 per cent

The sector’s performance also shrugged off overnight comments from a senior banking regulator, who urged banks to prepare for a rebound in bad loans and fully evaluate such risks.

At the close of trade, the Hang Seng index was down 513.81 points, or 1.76 per cent, at 28,621.92.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.06 per cent, while Japan’s Nikkei index closed down 2.03 per cent.

Europe

European stocks bounced back on Wednesday after their worst sell-off this year as optimism about a strong earnings season countered worries about a rapid rise in COVID-19 cases in some countries.

The pan-European STOXX 600 index rose 0.7 per cent after a blistering seven-week rally ran into a bout of profit-taking on Tuesday, when it fell 1.9 per cent.

Healthcare stocks gave the STOXX 600 its biggest boost, with Swiss drugmaker Roche jumping 3 per cent after predicting a surge in demand for its drugs for the remainder of 2021.

Semiconductor equipment maker ASML jumped 4.1 per cent to lift tech stocks after it raised its full-year sales forecast, citing strong demand amid a global computer chip shortage.

Among decliners, Italian football club Juventus slumped 13.7 per cent after breakaway European Super League founder and Juventus chairman Andrea Agnelli said the league can no longer go ahead after six English clubs withdrew.

On Wednesday, the European Union crossed one its last major hurdles to launch a 750 billion euro (US$900 billion) recovery fund.

On Thursday, the European Central Bank’s meets but no policy changes are expected to be made.

North America

Wall Street rebounded on Wednesday after a two-day decline in a broad rally as a tilt toward stocks poised to benefit from a recovering economy offset Netflix Inc's sell-off after its disappointing results a day earlier.

The Nasdaq Composite added 1.19 per cent to 13,950.22. The Dow Jones Industrial Average rose 0.93 per cent to 34,137.31, while the S&P 500 gained 0.93 per cent at 4,173.42.

Shares of Netflix slumped 7.4 per cent after the world's largest streaming service said slower production of TV shows and movies during the pandemic hurt subscriber growth in the first quarter.

The Russell 2000 Index of small-cap stocks gained 2.4 per cent in its biggest single-day advance since March 1.

"You take Netflix out of today's equation, it's simply a broad-based rally," said JJ Kinahan, chief market strategist at TD Ameritrade, adding technology shares still had room to run.

The VIX, CBOE's market volatility index, slid below 18, suggesting the market in days to come could be range-bound while shrugging off a rebound in COVID infections, he said.

Netflix's results dashed expectations but technology remains a major market focus.

"Investors feel more confident of the earnings growth prospects for technology," said Sam Stovall, chief investment strategist at CFRA Research in New York."They would rather gravitate toward the sure thing, which right now is tech stocks."

With Reuters

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

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