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Global Market Report - 26 June

Glenn Freeman  |  26 Jun 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open lower after losses on Wall Street overnight.

The SPI200 futures contract was down 36 points, or 0.55 per cent, at 6,558 at 7am in Sydney, suggesting an early slump for the benchmark S&P/ASX200 on Wednesday.

On Wall Street, the Dow Jones Industrial Average finished down 0.67 per cent, the S&P 500 was down 0.95 per cent and the tech-heavy Nasdaq Composite was down 1.51 per cent.

The Australian share market closed slightly lower on Tuesday, as investors remained cautious ahead of key trade talks later this week.

The S&P/ASX 200 Index slid 7.4 points, or 0.1 per cent, to 6,658 while the broader All Ordinaries lost 11 points, or 0.2 per cent, to end the session at 6734.5.

The Aussie dollar is buying 69.60 US cents, unchanged from Tuesday.

Asia

China stocks ended lower on Tuesday, ending a six-day winning streak, as concerns this week's meeting between Trump and Xi-Jinping will make little headway in ending the trade dispute.

The Shanghai Composite index was down 0.87 per cent at 2,982.07, having fallen further during the day. The blue-chip CSI300 index was down 1.04 per cent, after earlier falling as much as 2.25 per cent.

Financial stocks led the losses, down 1.5 per cent, while consumer staples, real estate and healthcare fell 0.55 per cent, 0.74 per cent and 0.13 per cent, respectively.

The Hong Kong market also ended lower, as investor sentiment was knocked again by fears around the US-China negotiations set for later this week.

The Hang Seng index was down 1.2 per cent at 28,185.98 points, while the Hang Seng China Enterprises index dropped 1.9 per cent.

Energy shares declined 1 per cent, the IT sector closed 1.7 per cent lower and the financial sector and the property and real estate sectors declined 1.5 per cent and 0.3 per cent.

Across the region, MSCI’s Asia ex-Japan stock index was weaker by 0.44 per cent, while Japan’s Nikkei index closed down 0.43 per cent.

In Japan, the Nikkei ended the day down 0.43 per cent at 21,193.81.

As the safe-haven yen hit 106.78 per dollar, its highest level since January, shares of blue-chip exporting companies fell. Toyota Motor Corp, Honda Motor Co, Hitachi and Tokyo Electron fell 0.6 per cent, 0.7 per cent, 1.1 per cent and 3.3 per cent, respectively.

Europe

The pan-European STOXX 600 index fell 0.1 per cent in thin trade yesterday, as most of Europe’s country indexes closed lower.

London’s FTSE rose slightly as energy and material stocks countered losses in most other sectors on the back of rising copper and oil prices.

Across the region, the banking sector fell ahead of speeches from US Federal Reserve policy makers, including chair Jerome Powell.

Shares in automaker Renault fell 2 per cent, as hopes of a quick fix to strained relations with Nissan Motor faded.

French retailer Carrefour's share price fell a day after it became the latest Western retailer to retreat from the Chinese market.

In Germany, the trade-sensitive DAX index slipped 0.4 per cent.

North America

Wall Street stock indexes have fallen, led by a sharp sell-off in technology shares as simmering trade concerns and disappointing economic data sent buyers to the sidelines, while the Federal Reserve chairman pushed back on pressure from President Donald Trump to cut interest rates.

All three major US stock indexes ended the session on Tuesday in the red after Powell said the Fed was grappling with whether trade uncertainties and other issues warrant rate cuts.

Speaking at the Council on Foreign relations, Powell also reiterated the Fed's independence, a day after Trump tweeted the Fed "doesn't know what it's doing".

US-China trade war anxieties found no relief in a White House official's remarks that Trump is "comfortable with any outcome" resulting from a planned meeting with Chinese President Xi Jinping at the Group of 20 summit convening in Japan on Friday.

On the economic front, new home sales and consumer confidence numbers both came in well below economist expectations, according to separate reports from the US Commerce Department and the Conference Board.

The Dow Jones Industrial Average fell 179.32 points, or 0.67 per cent, to 26,548.22; the S&P 500 lost 27.97 points, or 0.95 per cent, to 2,917.38; and the Nasdaq Composite dropped 120.98 points, or 1.51 per cent, to 7,884.72.

Of the 11 major indexes in the S&P 500, ten lost ground, with technology and communications services seeing the biggest percentage drops.

Rate-sensitive bank stocks were down 0.6 per cent, as US Treasuries benchmark yields fell below the closely watched 2 per cent level.

US biopharmaceutical company AbbVie said it would buy Allergan for about $US63 billion ($A90 billion), sending the Botox maker's shares up by 25.4 per cent. AbbVie's stock dropped 16.3 per cent.

Tyson Foods and Pilgrims Pride dipped 1.1 per cent and 1.3 per cent, respectively, after the US Department of Justice opened a criminal probe over possible poultry price fixing.

is senior editor for Morningstar Australia

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