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Global Market Report - 25 June

Glenn Freeman  |  25 Jun 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open lower after a mixed lead from Wall Street overnight.

The SPI200 futures contract was down 14 points, or 0.21 per cent, at 6,579 at 7am Sydney time, suggesting an early dip for the benchmark S&P/ASX200 on Tuesday.

On Wall Street, the Dow Jones Industrial Average closed up 0.03 per cent, the S&P 500 was down 0.17 per cent and the tech-heavy Nasdaq Composite was down 0.32 per cent.

Yesterday, the market rallied after opening down, ahead of a key meeting between presidents Donald Trump and Xi Jinping later this week.

The S&P/ASX 200 Index rose 14.6 points, or 0.2 per cent, to 6665.4 while the broader All Ordinaries advanced 11.2 points, or 0.2 per cent, to 6745.5.

The Aussie dollar is buying 69.66 US cents, from 69.55 US cents on Monday.

Ahead today: RBA governor Philip Lowe will participate in a panel session at the ANU Crawford Leadership Forum in Canberra.

Asia

China stocks were up slightly on Monday, as investors await positive signs of US-China negotiations at the G20 summit later this week.

China and the US should make compromises in trade talks, Chinese Vice Commerce Minister Wang Shouwen said on Monday, ahead of the much-anticipated meeting on the sidelines of the summit.

The Shanghai Composite Index gained 0.2 per cent to 3,008.15, while the blue-chip CSI300 index also rose 0.2 per cent to 3,841.27.

Stocks remained steady in Hong Kong for the same reasons, ending largely flat on Monday.
The Hang Seng index rose 0.1 per cent, to 28,513.00 points, while the China Enterprises Index gained 0.3 per cent, to 10,952.94 points.

MSCI’s Asia ex-Japan stock index was firmer by 0.2 per cent, while Japan’s Nikkei index closed up 0.13 per cent at 21,285.99 points.

Europe

European stock markets declined on Monday, as investors awaited US-China trade talks and weak German economic data dragged.

The pan-European STOXX 600 index closed 0.25 per cent lower, with most of its major component markets in the red, led by a 0.5 per cent dip in Frankfurt’s DAX.

Large European corporates continue to guide to slowing growth, as Mercedes-Benz maker Daimler's share price dropped 3.8 per cent after a cut to its 2019 earnings outlook.

Close competitors Volkswagen AG and BMW also slipped, as the European auto sector overall slid 1.2 per cent.

There was slightly better news in UK markets, as London's FTSE rose 0.1 per cent, thanks largely to gains in healthcare stocks. A weaker pound also helped boost the index's internationally-focused firms.

North America

On Wall Street, the S&P 500 has edged lower as losses by healthcare companies overshadowed gains in the technology sector, while investors await US President Donald Trump's meeting with Chinese President Xi Jinping at the G20 summit later this week.

The Nasdaq slipped but tariff-sensitive industrials, headed up by Boeing, led the blue-chip Dow Jones Industrial Average to a nominal advance.

While the bellwether S&P 500 ended the session in the red, it remained within a hair's breadth of its all-time closing high reached last Thursday, as markets reacted to a dovish statement from the US Federal Reserve.

Market players hope Trump and Xi will de-escalate the trade war that has been blamed for a global economic slowdown.

The Dow Jones Industrial Average rose 8.41 points, or 0.03 per cent, to 26,727.54 on Monday, the S&P 500 lost 5.11 points, or 0.17 per cent, to 2945.35.

The tech-heavy Nasdaq Composite dropped 26.01 points, or 0.32 per cent, to 8005.70.
Six of the 11 major sectors in the S&P 500 lost ground, with the biggest percentage drop for energy stocks as crude prices fell.

In the latest trade-related squabble, FedEx apologised for mistakenly returning a Huawei phone to its sender, after misrouting packages from the Chinese tech firm last month.

The move provoked the ire of Chinese authorities and raised the prospect of FedEx being added to China's "unreliable entities" list. The package delivery firm's shares slid by 2.7 per cent.

Caesars Entertainment jumped 14.5 per cent on news that rival Eldorado Resorts had agreed to buy the casino operator for $US8.5 billion. Eldorado dropped 10.6 per cent, while 
United Technologies advanced 1.1 per cent.

Celgene slipped 5.5 per cent after Bristol-Myers Squibb announced that its planned $US74 billion deal to buy the drugmaker was expected to close at the end of 2019 or beginning of 2020, later than expected. Bristol-Myers fell 7.4 per cent.

is senior editor for Morningstar Australia

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