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Global Market Report - 25 October

Lex Hall  |  25 Oct 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open higher despite a mixed lead from overseas.

The SPI200 futures contract was up 42.0 points, or 0.63 per cent, at 6,714.0 at 7am Sydney time, suggesting a firmly positive start for the benchmark S&P/ASX200 on Friday.

The Australian share market closed higher for a fourth day yesterday, buoyed by energy stocks as the price of crude jumped higher.

The benchmark S&P/ASX200 index finished Thursday up 20.5 points, or 0.31 per cent at 6,693.6, while the broader All Ordinaries was up 18.5 points, or 0.27 per cent, at 6,796.7 points.

On Wall Street overnight, the Dow Jones Industrial Average was down 0.08 per cent, the S&P 500 was up 0.22 per cent and the tech-heavy Nasdaq Composite was up 0.75 per cent.

The Aussie dollar is buying 68.18 US cents from 68.45 US cents on Thursday.


China stocks ended flat on Thursday in lacklustre trading, as investors awaited more policy signals ahead of a key meeting of the ruling Communist Party next week.

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The blue-chip CSI300 index was unchanged at 3,870.67, while the Shanghai Composite Index was also flat at 2,940.92.

Hong Kong stocks closed higher on Thursday, on hopes of more stimulus to support the island city’s faltering growth amid political unrest.

The Hang Seng index rose 0.9 per cent to 26,797.95, while the China Enterprises Index gained 0.8 per cent to 10,532.85.Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.42 per cent, while Japan’s Nikkei index closed up 0.55 per cent.


With no fireworks from European Central Bank chief Mario Draghi’s last policy meeting on Thursday, encouraging results from German heavyweights and British drugmaker AstraZeneca drove European stocks to their strongest close since January 2018.

Frankfurt shares touched a 16-month high, pushed higher by a 3.4 per cent gain for the world's largest chemical company BASF after it confirmed its annual outlook even as operating income tumbled 24 per cent in third quarter.

Daimler rose 3.3 per cent after reporting a slight rise in quarterly operating profit, boosted by sales of Mercedes-Benz cars.

Shares of trade-sensitive carmakers and chemical companies, which have taken a toll from a bruising US-China trade war and signs of slowing global growth, rose 1.1 per cent and 0.8 per cent, respectively.

The pan-European stocks index rose 0.6 per cent to 397.37, its strongest closing level in over 20 months.

Healthcare stocks rose 1.5 per cent, leading gains among the major European subsectors. AstraZeneca jumped 5.6 per cent after lifting its annual drug sales forecast following a surge in revenue from newer cancer treatments.

European markets entered the third quarter earnings season this month in nervous form, with signs that Germany was heading into recession weighing on expectations for growth across the region.

Data on Thursday showed euro zone business activity stagnated in October as demand withered, according to a survey published on Thursday hours before ECB’s Draghi made his swansong appearance.

In response, the euro weakened against the dollar, while eurozone stocks gave up some gains before closing 0.4 per cent higher.

At the last press conference of Draghi’s eight-year tenure, the man credited with saving the euro from collapsing kept the door open to even more easy money, days before he hands the reins over to Christine Lagarde on 31 October.

The ECB made no new policy moves on Thursday, having decided in September to restart bond purchases at a pace of 20 billion euros per month while also cutting its deposit rate to -0.5 per cent.

On a sour note, Nokia’s shares recorded their biggest percentage drop on record, plummeting 23.4 per cent after the company cut its 2019 and 2020 profit outlook due to pressure from rivals in the 5G industry.

The telecom maker's report weighed on Helsinki-listed stocks, which fell 1.5 per cent.

Chipmakers came out with mixed results, with Aixtron and Siltronic reporting a fall in third quarter sales, while Dialog Semiconductor raised its forecast for the third quarter.

North America

The S&P 500 and the Nasdaq rose have risen following strong quarterly reports from several technology companies, including Microsoft Corp, but dour results from 3M Co stymied the Dow Jones Industrial Average.

Microsoft shares gained 2.0 per cent as the tech giant's outlook for cloud computing services surpassed analysts' expectations, while shares of PayPal Holdings Inc rose 8.6 per cent on the payments company's strong full-year earnings forecast.

Microsoft and PayPal were the top boosts to the S&P 500 and the Nasdaq.

Shares of 3M dropped after the industrial conglomerate missed third-quarter sales estimates and lowered its full-year profit forecast. The company's US sales dropped 1.1 per cent and its Asia-Pacific sales fell 5 per cent as industrial production slowed.

Individual company results have greatly swayed the direction of Wall Street's major indexes this week in the midst of earnings season. More than 80 per cent of the 168 S&P 500 companies that have reported results have beaten profit expectations, according to Refinitiv data.

The Dow Jones Industrial Average fell 28.42 points, or 0.11 per cent, to 26,805.53, the S&P 500 gained 5.77 points, or 0.19 per cent, to 3,010.29 and the Nasdaq Composite added 66.00 points, or 0.81 per cent, to 8,185.80.

After the bell, shares of Intel Corp and Amazon.com Inc moved sharply following the companies' results. Intel shares were last up about 8 per cent while Amazon shares were last down around 9 per cent.

Lam Research Corp shares jumped 13.9 per cent, hitting a record high, after the chip equipment maker forecast strong results for the December quarter. Lam Research was the top boost to the Philadelphia SE Semiconductor index, which rose 2.5 per cent a day after being pressured by losses in shares of Texas Instruments Inc.

Twitter shares plummeted 20.8 per cent after the social networking company's revenue and profit missed estimates, in part due to technical issues with its ad platform.

Ford Motor Co shares tumbled 6.6 per cent after the automaker cut its profit outlook for the year. By contrast, Tesla Inc shares surged 17.7 per cent after the electric car maker reported a surprise quarterly profit.

Dow Inc shares advanced 4.7 per cent after the chemicals company beat profit estimates, having cut costs to offset a sharp drop in global demand.

Johnson & Johnson shares fell 1.8 per cent after CVS Health Corp said it was pulling 22-ounce (650ml) bottles of J&J baby powder from its stores.


is senior editor for Morningstar Australia

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