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Global Market Report - 26 April

Lewis Jackson  |  26 Apr 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to edge higher at the open, bolstered by continuing US enthusiasm for technology shares.

The Australian SPI 200 futures contract was up 4 points or 0.1 per cent to 7,026 at 7am Sydney time on Monday, suggesting a positive start to trading.

US stocks rallied last Friday, driving the S&P 500 to a near-record closing high, after factory data and new home sales underscored a booming economy while megacap stocks rose in anticipation of strong earnings reports this week.

The Dow Jones Industrial Average rose 0.67 per cent to 34,043.49 and the S&P 500 gained 1.09 per cent at 4,180.17, just below its previous closing high of 4,185.47 on April 16. The Nasdaq Composite added 1.44 per cent at 14,016.81.

Locally, Australia's share market finished last week about where it started, a little below record levels, but the latest COVID-19 lockdown in Western Australia means there is no certainty of scaling those heights this week.

The benchmark S&P/ASX200 index closed up 5.3 points, or 0.08 per cent, to 7,060.7 on Friday.

The All Ordinaries closed higher by 8.7 points, or 0.12 per cent, to 7,320.7 points.

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Shares in financials and telecommunications proved best, rising by 0.4 per cent.

The biggest losses were in consumer discretionaries, which lost about one per cent.

After trading closed, Western Australia Premier Mark McGowan declared a three-day lockdown from midnight for people in Perth and the Peel region.

Online retailer Kogan crashed by 14.27 per cent to $10.69 after investors were disappointed by a first quarter update.

Clothing chain Glue Store has been sold in a $13 million deal to Accent Group, which owns The Athlete's Foot and Dr Martens.

In banking, the big four all gained less than half a per cent.

Bank of Queensland, Bendigo and Macquarie all rose by more than one per cent.

In mining, the notable movers were South32, which rose 2.11 per cent to $2.90. Fortescue gained 1.59 per cent to $21.66.

On Wednesday, the consumer price index for the March quarter is due. Commonwealth Bank economists have tipped headline inflation to climb by 1.1 per cent for the quarter.

Coles will reveal sales from its third quarter.

On Thursday, rival Woolworths will publish third quarter sales figures.

Gold was down 0.4 per cent at $US1,777.20 an ounce; Brent crude was up 1.1 per cent to $US66.11 a barrel; Iron ore was up 1.4 per cent to $US186.25 a tonne.

Meanwhile, the Australian dollar was buying 77.39 US cents at 7:00am, up from 77.11 this time Friday.

Asia

China stocks rose last Friday as President Xi Jinping’s renewed green pledge bolstered clean energy stocks while a flare-up of coronavirus cases in some Asian countries helped support healthcare shares.

The blue-chip CSI300 index rose 0.9 per cent, to 5,135.45, while the Shanghai Composite Index gained 0.3 per cent to 3,474.17 points.

For the week, CSI300 climbed 3.4 per cent, the biggest weekly gain in two months, while SSEC was up 1.4 per cent.

An index tracking China’s environment protection stocks rose over 1 per cent after Chinese President Xi reiterated his pledge to make China carbon neutral by 2060. China will start phasing down coal use from 2026, Xi said at a summit of global leaders on Thursday.

The Hang Seng index rose 1.1 per cent, to 29,078.75, while the China Enterprises Index gained 1.2 per cent, to 11,067.84 points.

Europe

European stocks marked their first weekly loss in eight last Friday as a surge in global coronavirus cases offset optimism about a strong earnings season, while Madrid-based Allfunds jumped on its Amsterdam market debut.

The pan-European STOXX 600 slipped 0.2 per cent and was on course for a 0.8 per cent weekly drop. Defensive plays such as the healthcare sector and consumer stocks were among the biggest decliners, while surging commodity prices lifted miners.

Sentiment was hit following reports on Thursday that US President Joe Biden planned to raise income taxes on the wealthy, a proposal some said would be hard to pass in Congress.

Meanwhile, India reported the world’s highest daily tally of coronavirus cases for a second day and Japan was set to declare “short and powerful” states of emergency for Tokyo, Osaka and two other prefectures as the country struggles to contain a resurgent pandemic.

Major regional indexes barely moved after a survey showed the euro zone’s recovery from the pandemic-led economic downturn was much stronger than expected in April.

North America

US stocks rallied last Friday, driving the S&P 500 to a near-record closing high, after factory data and new home sales underscored a booming economy while megacap stocks rose in anticipation of strong earnings reports this week.

The bounceback follows a sell-off last Thursday when reports that US President Joe Biden plans to almost double the capital gains tax spooked investors. Analysts dismissed the slide as a knee-jerk reaction and pointed to the strong outlook.

The Dow Jones Industrial Average rose 0.67 per cent to 34,043.49 and the S&P 500 gained 1.09 per cent at 4,180.17, just below its previous closing high of 4,185.47 on April 16. The Nasdaq Composite added 1.44 per cent at 14,016.81.

Earnings take center stage this week when 40 per cent of the S&P 500's market cap report on Tuesday through Thursday, including the tech and related heavyweights of Microsoft Corp, Google parent Alphabet Inc, Apple Inc and Facebook Inc.

Ron Temple, head of US equity at Lazard Asset Management, said the US economy is about to post the strongest growth in 50 years, with more than 6 per cent gains both this year and next.

The Federal Reserve will allow the economy to run hotter than in the past, adding to the high-growth outlook.

"Investors are gradually coming around to the sheer magnitude of excess savings, pent-up demand and the implications of such a massive wave of fiscal stimulus," Temple said.

Image sharing company Pinterest Inc gained 4.2 per cent as Credit Suisse raised its price target, saying newer product offerings and expanding footprint in markets abroad will yield higher revenue and user growth.

With Reuters

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

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