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Global Market Report - 27 November

Lex Hall  |  27 Nov 2020Text size  Decrease  Increase  |  
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Australia

Australian shares are set to extend yesterday's losses following falls on European markets and lighter trading as Wall St closed for Thanksgiving.

The Australian SPI 200 futures contract was down 17 points, or 0.3 per cent, to 6,626 points at 8.30am Sydney time on Friday, suggesting a negative start to trading.

Wall Street was closed for the Thanksgiving holiday.

Locally, Bega Cheese has acquired the Lion dairy and drinks business for $560 million to add milk, juice and yoghurt brands which also include Big M and Yoplait, to its stable, the AFR reports.

The S&P/ASX200 benchmark index closed lower by 46.9 points, or 0.7 per cent, to 6,636.4 on Thursday. The All Ordinaries closed down 39.4 points, or 0.57 per cent, to 6,848.8.

Gold was up 0.2 per cent at $US1,810.35 an ounce; Brent oil was down 1.7 per cent to $US47.80 a barrel; Iron ore was up 0.8 per cent to $US128.39 a tonne.

Meanwhile, the Australian dollar was buying 73.64 US cents at 8.30am, slightly up from 73.62 US cents at Thursday's close.

Asia

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China’s main stock indexes ended higher on Thursday, rebounding from two days of losses as gains in financial and consumer shares offset drops in health care, tech and new energy vehicle firms.

At the close, the Shanghai Composite index was up 0.22 per cent at 3,369.73. The blue-chip CSI300 index was up 0.18 per cent, with its financial sector sub-index higher by 1.14 per cent, the consumer staples sector up 0.3 per cent and the healthcare sub-index down 0.46 per cent.

In Hong Kong, the Hang Seng finished up 0.56 per cent at 26,819.45.

Around the region, MSCI’s Asia ex-Japan stock index was 0.57 per cent weaker, while Japan’s Nikkei index closed up 0.91 per cent.

Europe

European shares were little changed on Thursday as an extension of coronavirus restrictions in Germany and a grim growth forecast for the United Kingdom brought the focus back to the economic impact from the covid-19 pandemic.

The pan-European STOXX 600 index was flat at 0920 GMT, with gains in tech and healthcare stocks offset by declines in the autos and energy sectors.

A second wave of covid-19 infections swept across Europe last month, prompting Germany, France and the United Kingdom to once again impose tough lockdown measures, dealing a heavy blow to business activity as restaurants, gyms and shops remained closed.

The benchmark STOXX 600 index is however still on course for its best month on record and market participants expect European equities to touch record highs next year, following promising vaccine trial results from three major drugmakers.

“The global rally seems to have paused for now ... while the release of vaccine results is promising, we do not know yet when this pandemic will be completely over,” Hussein Sayed, chief market strategist at trading firm FXTM wrote in a note.

Trading volumes are expected to be thin in light of the Thanksgiving holiday in the US.

Chancellor Angela Merkel said on Wednesday Germany will extend restrictive measures imposed early this month to rein in a second wave of infections that is sweeping much of Europe, until at least 20 December.

Germany’s blue-chip DAX was largely flat, while France’s benchmark CAC 40 also erased early gains to trade slightly higher after a survey showed consumer confidence in the country fell to a two-year low in November.

Investors were also awaiting details on post-lockdown restrictions in England.

British health secretary Matt Hancock will tell the parliament later in the day which of three tiers, ranging from the lowest at tier 1 to the highest at 3, each English local authority will fall under, when a national lockdown ends next week.

UK’s domestically exposed stocks extended losses after a selloff in the previous day, when Finance Minister Rishi Sunak warned the economy was on course to shrink by 11.3 per cent this year and unveiled plans to borrow amounts not seen before during Britain’s peacetime.

In company news, Amigo Holdings dropped 1.3 per cent after the subprime lender reported a 36.5 per cent slump in first-half revenue and flagged “material uncertainty” about its future operations.

North America

The US markets were closed for Thanksgiving.

is senior editor for Morningstar Australia

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