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Global Market Report - 26 March

Lex Hall  |  26 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are tipped to edge higher despite choppy overseas trade, as global growth fears spill into a new week.

The SPI200 futures contract was up 12 points, or 0.2 per cent, at 6,120.0 at 8am Sydney time on Tuesday, suggesting the benchmark S&P/ASX200 will rebound at the open after its worst session in 12 weeks.

Yesterday, the ASX recorded its worst session in 12 weeks amid fears of a worldwide economic slowdown.

The benchmark S&P/ASX200 index closed down 69 points, or 1.11 per cent, to 6,126.2 points, while the broader All Ordinaries was down 72.2 points, or 1.15 per cent, at 6,208.7.

Monday's 1.57 per cent fall came amid mounting concerns over global growth, with US, European, and Asian stocks mixed overnight.

On Wall Street, Apple shares dropped 1.8 per cent and were the biggest drag on indexes as the iPhone maker unveiled its long-awaited video streaming service.

The Dow Jones rose 14.51 points, or 0.06 per cent, to 25,516.83, the S&P 500 lost 2.35 points, or 0.08 per cent, to 2,798.36 and the Nasdaq Composite dropped 5.13 points, or 0.07 per cent, to 7,637.54.

The Aussie dollar has recovered ground, buying 71.13 US cents from 70.83 US cents on Monday.

ASIA

Chinese stocks fell on Monday tracking a global sell-off, as sentiment for equities soured on growing fears about a US recession, and on caution ahead of fresh US-China trade talks.

The blue-chip CSI300 index fell 2.4 per cent to 3,742.83 points, while the Shanghai Composite Index closed down 2 per cent to 3,043.03 points.

Hong Kong stocks posted their worst day in nearly three months, tracking the global selloff. The Hang Seng index fell 2 per cent to 28,523.35 points, its biggest single-day drop since 2 January, while the China Enterprises Index lost 2.5 per cent to 11,232.07 points.

Sectors fell across the board, led by energy firms.

The Hang Seng energy index tumbled 4.1 per cent, as China’s biggest coal miner China Shenhua plummeted 6.9 percent after slower profits in 2018.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for talks scheduled to start on 28 March, while a Chinese delegation led by Vice Premier Liu He will visit Washington next week, the White House said on Saturday.

Around the region, MSCI’s Asia ex-Japan stock index slipped 1.67 percent, while Japan’s Nikkei index closed down 3.01 per cent.

EUROPE

Europe suffered a fourth day of losses as persistent worries about the pace of global growth and Brexit uncertainty took their toll on shares in the region.

The pan-European STOXX 600 index closed 0.45 per cent lower and is now nearly 3 percent lower than the six-month peak reached on March 19.

European stocks pulled back from an initial 0.8 per cent fall after an unexpected rise in German business sentiment that eased fears of a recession in the European Union’s largest economy.

London’s FTSE 100 led losses with a 0.42 per cent fall, while the more domestically-exposed midcap FTSE 250 lost more than 1 per cent to hit a six-week low, dragged down by uncertainty over Britain’s EU exit.

Germany, Paris and Madrid fell about 0.2 per cent, while Milan lost 0.1 per cent, although nearly all major indices were trading below 30-day average volumes.

European stocks last week recorded their steepest drop for the year as weak manufacturing data from Europe and the US exacerbated fears of a global slowdown.

Among the biggest fallers on the pan-region index was Bayer, which was down 2.9 per cent after the German pharmaceuticals group and Johnson & Johnson agreed to settle thousands of US lawsuits against their blood thinner Xarelto for $775 million.

NORTH AMERICA

The S&P 500 Index ended a choppy session slightly lower on Monday as worries about a slowdown in global economic growth lingered and as Apple Inc shares fell after the company unveiled its video streaming service.

Indexes moved between negative and positive territory throughout the session, with investors keeping their eyes on the US Treasury market.

Benchmark 10-year Treasury yields fell to their lowest levels since December 2017, while the yield curve between three-month bills and 10-year notes inverted further as investors continued to assess last week’s dovish pivot by the Federal Reserve.

The Fed flagged an expected slowdown in the economy last week and decided against raising interest rates this year.

The yield curve inversion, if it holds, is seen by some as an indicator that a recession is likely in one to two years. Ten-year notes were last yielding about 2.4 per cent.

The S&P 500 financial index ended down 0.4 per cent, falling for a fifth straight day, its longest losing streak this year.

The Dow ended higher, helped by a 2.3 percent gain in Boeing Co after the planemaker said it would brief pilots and regulators this week on software and training updates for its 737 MAX aircraft, with Ethiopian Airlines and Qatar Airways expressing confidence in the company despite a recent fatal crash.

Apple shares fell 1.2 per cent and were the biggest drag on indexes. The iPhone maker unveiled its long-awaited Apple TV+ original content streaming service and Apple TV Channels subscription service, joining a crowded market for streaming options.

The Dow Jones Industrial Average rose 14.51 points, or 0.06 per cent, to 25,516.83, the S&P 500 lost 2.35 points, or 0.08 per cent, to 2,798.36 and the Nasdaq Composite dropped 5.13 points, or 0.07 per cent, to 7,637.54.

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