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Global Market Report - 25 January

Lex Hall  |  25 Jan 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market appears poised to open higher following a mixed overnight session on Wall Street.

The SPI200 futures contract was up 16 points, or 0.28 per cent, at 5,824 at 7am Sydney time on Friday, indicating a positive start for the benchmark S&P/ASX200. Yesterday, the ASX edged up to close higher, but the Aussie dollar took a dive after NAB joined its big four rivals in hiking its variable mortgage rates.

The local currency was up after new data revealed the jobless rate fell, but NAB's move immediately pushed the Aussie back down amid concern the RBA might cut rates later in the year.

The Australian dollar has continued the slide sparked by NAB's move, dropping to 70.89 US cents from 71.05 at 4.30pm on Thursday.

The local unit has given up 0.77 of a cent since lunchtime Thursday.

The S&P 500 has edged higher but the Dow has closed nominally lower as lingering anxieties about slowing global growth and unresolved trade disputes undercut a spate of strong earnings, while chipmakers rallied to give the Nasdaq a solid gain.

The Dow Jones Industrial Average fell 22.38 points, or 0.09 per cent on Thursday to 24,553.24, the S&P 500 gained 3.63 points, or 0.14 per cent, to 2642.33 and the Nasdaq Composite added 47.70 points, or 0.68 per cent, to 7073.46.

AMP has flagged a 96 per cent drop in full-year profit after confirming it will set aside another $200 million to cover the cost of remediation. The wealth manager expects net profit attributable to shareholders for the 12 months to 31 December of about $30 million, compared to $848 million in 2017.

ASIA

Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.42 per cent and the Shanghai Composite rose 0.41 per cent. The Nikkei 225 lost 0.09 per cent.

Tencent fell for a third straight day to end 0.9 per cent lower, after China's cyber watchdog included the company’s games in a list of 8000 "malicious" mobile apps it had deleted.

Hong Kong's biggest property developer Sun Hung Kai Properties gained 0.88 per cent, its highest since June last year, after it won a bid of US$1.43 billion for a residential plot on the old airport runway, Kai Tak, the South China Morning Post reported.

EUROPE

European shares ended off highs on Thursday as a bounce in tech stocks after results from chipmaker STMicro was offset by late slide among banks following downbeat comments from ECB President Mario Draghi over the health of the region's economy.

The CAC 40 gained 0.65 per cent and the DAX rose 0.53 per cent. The FTSE 100 lost 0.35 per cent.

Draghi acknowledged on Thursday that economic growth in the euro zone was likely to be weaker than previously expected due to the fallout from factors ranging from China’s slowdown to Brexit.

That drove European stocks off earlier highs, while banks changed course, also hit by Draghi downplaying the possibility of a new round of cheap funding for the battered sector.

NORTH AMERICA

The S&P 500 edged higher but the Dow closed nominally lower on Thursday as lingering anxieties about slowing global growth and unresolved trade disputes undercut a spate of strong earnings, while chipmakers rallied to give the Nasdaq a solid gain.

Fourth-quarter earnings continued to be generally positive, but US Commerce Secretary Wilbur Ross’ comments that the US and China were "miles and miles" from reaching a trade agreement curbed investor enthusiasm.

Chipmakers led the Nasdaq's rise, as Xilinx and Lam Research reported quarterly results that beat analyst expectations. Texas Instruments, while posting better-than-expected profit, disappointed on revenue.

The Philadelphia SE Semiconductor Index, under pressure in recent months after Apple warned of waning smartphone demand, was saw its biggest one-day percentage gain since 26 December, advancing 5.7 per cent.

Still, even in the face of upbeat corporate results, fears surrounding tariffs and the longest federal government shutdown in history weighed on investors.

Commercial air carriers American Airlines Group, Southwest Airlines Co and JetBlue Airways Corp all reported quarterly earnings that surpassed consensus estimates amid growing pressures related to the government shutdown.

The S&P 500 Airlines index gained 3.3 per cent.

Union Pacific Corp also reported earnings that surprised to the upside. The railroad operator, along with airlines and other companies, is a constituent of the closely watched Dow Jones Transportation index, ended the session up 1.1 per cent.

The Dow Jones Industrial Average fell 22.38 points, or 0.09 per cent, to 24,553.24, the S&P 500 gained 3.63 points, or 0.14 per cent, to 2,642.33 and the Nasdaq Composite added 47.70 points, or 0.68 per cent, to 7,073.46.

Of the 11 major sectors of the S&P 500, all but consumer staples, healthcare and materials advanced.

Fourth-quarter reporting season is in full-swing. With nearly one-fifth of S&P 500 companies having reported, 75.3 percent have surpassed Street estimates. Analysts now see S&P profit growth of 14.2 percent for the quarter.

Shares of Textron jumped 5.6 per cent after beating analyst profit estimates and forecast better-than-expected 2019 profit.

PG&E soared by 74.6 per cent after the California utility was cleared of the 2017 Tubbs fire.
Mining company Freeport-McMoRan slid 13.1 per cent after missing fourth-quarter profit expectations due to falling copper prices.

Intel Corp fell in after-hours trading after reporting lower-than-expected fourth-quarter revenue due to weakening demand.

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