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Global Market Report - 23 December

Lex Hall  |  23 Dec 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open lower despite gains on Wall Street at the end of last week.

The SPI200 futures contract was down 26.0 points, or 0.39 per cent, at 6,726.0 at 8am Sydney time, suggesting a fall for the benchmark S&P/ASX200 on Monday.

The Australian share market lost an early lead from Wall Street on Friday to make it consecutive days in the red, but still had its best week in three after a strong start to the pre-Christmas week.

The benchmark S&P/ASX200 index finished on Friday 16.8 points, or 0.25 per cent, lower at 6,816.3 points, while the broader All Ordinaries slipped 16.5 points, or 0.24 per cent, to 6,926.1 points.

On Wall Street on Friday, the Dow Jones Industrial Average was up 0.28 per cent, the S&P 500 was up 0.49 per cent and the tech-heavy Nasdaq Composite was up 0.42 per cent.

The Aussie dollar is buying 69.01 US cents from 68.89 US cents on Friday.


Mainland stocks fell on Friday, but remained above the 3000-point mark and posted a third straight week of gains.

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The benchmark Shanghai Composite Index dipped 0.4 per cent on the day to 3,004.94 points. The smaller Shenzhen Component Index fell 0.65 per cent to 10,229.49 points, while the blue chip CSI300 index closed 0.25 per cent lower at 4,017.25 points.

In Hong Kong, the Hang Seng ended the week up less than 0.3 per cent at 27,811.35.

For the week, the benchmark was up 0.5 per cent, marking the third straight week of gains. 

Japan’s Nikkei share average dipped on Friday as investors took profits, especially in large caps, and awaited more clarity on a US-China trade deal announced last week.

The Nikkei share average fell 0.20 per cent to 23,816.63, while the broader Topix lost 0.18 per cent to 1,733.07, with the Topix core 30 of the biggest firms falling 0.56 per cent. For the week, the Nikkei fell about 0.9 per cent after three weeks of gains.


European stocks came close to a record high on Friday as further confirmation of a Jan. 31 Brexit date saw investors buying into markets that have been roiled by uncertainty for more than three years.

British Prime Minister Boris Johnson won approval for his Brexit deal in parliament on Friday, further convincing markets that an overwhelming Conservative majority will likely result in a smooth exit from the European Union.

Positive headlines on Brexit, along with a thaw in Sino-US trade tensions, have primed the STOXX 600 for its best fourth quarter since 2011. Analysts also expect a relatively stronger 2020 on the back of recovering economic growth in the bloc.

“The reason for the optimism is that we know through Christine Lagarde that the monetary policy in the EU will continue to do the heavy lifting, although its effects have diminished,” said Ephie Coumanakos, managing partner of Concord Financial Group.

“Overall, 2020 could be a good year for Europe. Not an accelerating year - growth will still remain fairly subdued - (but) we’re starting to see some improvement. We hope to see a little more inflation. I’m cautiously optimistic.”

The pan-European STOXX 600 rose 0.7 per cent on Friday, coming just a few points off a record peak touched earlier in the week.

Milan-listed shares outperformed regional peers for the day, touching their highest in more than 1½ years on gains in Italy's biggest utility, Enel. Its shares rose 1 per cent after Moody's improved its outlook on the Latin American unit Enel Americas to positive.

Payments group Nexi gained 2.4 per cent after Intesa SanPaolo on Thursday said it was selling its retailers’ payment business to Nexi in a 1 billion-euro ($1.1 billion) deal.

France's CAC touched its highest level since July 2007, rising nearly 0.7 per cent. Cosmetics maker L'Oreal SAwas the best performer on the index.

London's exporter-heavy FTSE 100 was flat as the pound strengthened. Domestically focused stocks recovered from losses earlier in the day to trade sideways.

The final reading on Britain’s third quarter growth showed the economy grew a little faster than first estimated and the country’s current account deficit shrank to its smallest since 2012.

Among individual stocks, the London-listed shares of travel firm Carnival Corp were the best performers on the STOXX 600 after its quarterly revenue beat expectations.

NMC Health was the worst performer on the STOXX 600, falling for a fourth straight session after short seller Muddy Waters took aim at the stock earlier in the week.

North America

US stocks hit record closing highs again on Friday and the S&P 500 registered its biggest weekly percentage gain since early September after data showed a rise in consumer spending and investors continued to be optimistic about developments in the US-China trade dispute.

President Donald Trump claimed progress on issues from trade to North Korea and Hong Kong after speaking with Chinese President Xi Jinping, dispelling fears of another escalation in the two countries’ trade war.

The S&P 500 also hit a seventh straight intraday all-time high in its longest streak of record intraday highs since October 2017, and the Nasdaq ended with gains for an eighth session in a row.

The Dow Jones Industrial Average rose 78.13 points, or 0.28 per cent, to 28,455.09, the S&P 500 gained 15.85 points, or 0.49 per cent, to 3,221.22 and the Nasdaq Composite added 37.74 points, or 0.42 per cent, to 8,924.96.

The S&P 500 rose for a fourth straight week, gaining 1.7 per cent for the week, its biggest weekly gain since early September.

Consumer spending, a key to US economic growth and a major focus for investors, rose 0.4 per cent in November, adding to a string of upbeat data that have helped put a damper on recession fears, which dogged markets earlier this year.

Volume on US exchanges hit the highest in a year, boosted by “quadruple witching,” in which investors unwind positions in futures and options contracts before their expiration. About 11.53 billion shares changed hands on Friday.

Nike Inc was down 1.2 per cent after the world’s largest sportswear maker reported lower-than-expected growth in revenue from North America.

Cruise operators were among top percentage gainers in the S&P 500, led by Carnival Corp, which jumped 7.6 per cent after forecasting a 2020 profit largely above estimates.

On the flip side, shares of US Steel Corp tumbled 10.8 per cent after the company said it expects a bigger-than-expected fourth-quarter loss.


is senior editor for Morningstar Australia

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