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Global Market Report - 27 March

Lex Hall  |  27 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open flat despite gains on Wall Street overnight.

The SPI200 futures contract was up 10 points, or 0.16 per cent, at 6,125.0 at 8am Sydney time, suggesting a marginal increase for the benchmark S&P/ASX200 on Wednesday.

The ASX closed slightly higher yesterday, lifted by utilities and the mining sector even as energy shares and Wesfarmers weighed down the index.

The benchmark S&P/ASX200 index closed up 4.4 points, or 0.07 per cent, to 6,130.6 points on Tuesday, while the broader All Ordinaries was also up 4.4 points, or 0.07 per cent, at 6,213.1.

On Wall Street overnight, the Dow Jones Industrial Average was up 0.31 per cent, the S&P 500 was up 0.41 per cent and the tech-heavy Nasdaq Composite was up 0.39 per cent.

The Aussie dollar is buying 71.39 US cents from 71.22 US cents on Tuesday.

ASIA

Chinese shares fell on Tuesday, extending the previous session’s sharp losses as investors remained concerned over the outlook for global growth and the next round of China-US trade talks.

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At the close, the Shanghai Composite index was down 1.51 per cent at 2,997.10 points.

The blue-chip CSI300 index was down 1.13 percent, with its financial sector sub-index lower by 0.76 per cent, the real estate index down 0.42 per cent and the healthcare sub-index down 1.59 per cent. But consumer staples firms rebounded from heavy losses on Monday, gaining 0.57 per cent.

Hong Kong shares steadied on Tuesday after the previous session’s heavy losses.

At the close of trade, the Hang Seng index was up 0.15 per cent at 28,566.91 points. The Hang Seng China Enterprises index was steady at 11,231.73.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.06 per cent, while Japan’s Nikkei index closed up 2.15 per cent.

EUROPE

European shares rose on Tuesday, snapping a four-day losing streak, boosted by healthcare stocks and on indications that UK Prime Minister Theresa May’s deal to exit the European Union could gain some support.

The pan-region STOXX 600 index added to early gains and rose 0.8 per cent, led by Switzerland and Paris’s near 1 per cent jump, followed by Frankfurt’s 0.6 per cent gain. Milan rose 0.4 per cent, while London’s FTSE closed 0.26 per cent higher.

Dublin, considered a barometer of Brexit mood, bounced off a five-week low hit early in the session to end 0.2 per cent higher after two eurosceptic politicians indicated they might agree to support May’s Brexit deal after parliament took control over the Brexit process for a day.

Politicians will vote on a range of Brexit options on Wednesday, giving parliament a chance to indicate whether it can agree on a deal with closer ties to Brussels before trying to push the government in that direction.

The healthcare index was the biggest gainer among STOXX 600 sectors, up 1.5 per cent driven by gains in ConvaTec Group and Novartis.

Ocado rose 4 per cent as the British online supermarket partnered with Australia’s Coles Group - its fifth major overseas deal in less than 18 months.

NORTH AMERICA

US stocks have gained overnight with financials snapping a five-day losing streak as Treasury yields stabilised above 15-month lows. The S&P 500 financial index gained 1.1 per cent and registered its biggest daily percentage gain since 15 February.

Benchmark 10-year note yields were steady on Tuesday but above the level reached on Monday, which was the lowest since December 2017.

The S&P 500's gains came after two sessions of declines, triggered by concern about slowing global economic growth and the inversion of a closely watched part of the Treasury yield curve.

If it persists, the yield curve inversion is seen as an indicator that a recession is likely in one to two years.

Also helping stocks, the S&P energy index jumped 1.5 per cent, leading percentage gains among sectors, as oil prices rose on OPEC supply cuts and expectations of lower US inventories.

The Dow Jones Industrial Average rose 140.9 points, or 0.55 per cent, to 25,657.73, the S&P 500 gained 20.1 points, or 0.72 per cent, to 2,818.46 and the Nasdaq Composite added 53.98 points, or 0.71 per cent, to 7,691.52.

Apple shares ended down 1 per cent, reversing early gains, after a US trade judge recommended Qualcomm win a sales ban on some Apple iPhone models containing chips made by Intel Corp in one of two patent disputes.

Investors also digested weak consumer confidence numbers for March, as well as housing data that showed US homebuilding fell more than expected in February.

Carnival Corp tumbled 8.7 per cent after the world's largest cruise operator cut its annual profit forecast.

is senior editor for Morningstar Australia

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