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Global Market Report - 28 June

Glenn Freeman  |  28 Jun 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open lower as investors await a meeting between the US and Chinese leaders at the G20 summit in Japan.

The SPI200 futures contract was down 9 points, or 0.14 per cent, at 6,594 at 8am in Sydney, suggesting an early dip for the benchmark S&P/ASX200 on Friday.

On Wall Street overnight, the Dow Jones Industrial Average finished down 0.04 per cent, the S&P 500 was up 0.38 per cent and the tech-heavy Nasdaq Composite was up 0.73 per cent.

Chinese President Xi Jinping and US President Donald Trump are expected to meet on Saturday amid hopes of easing trade tensions between the two countries.

Australian shares ended slightly higher yesterday, as investors anxiously await the outcome of the meeting.

The S&P/ASX 200 Index closed 25.8 points, or 0.4 per cent, higher at 6666.3 while the broader All Ordinaries added 26.9 points, or 0.4 per cent, to end the session at 6743.

The Aussie dollar is buying 70.06 US cents, from 69.94 US cents on Thursday.


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Chinese shares ended higher on Thursday as hopes rose that the United States and China could reach an agreement to prevent further escalation in their trade war, ahead of a meeting between leaders of the two countries this weekend.

At the close, the Shanghai Composite index was up 0.69 per cent at 2,996.79, after two straight sessions of losses. The blue-chip CSI300 index was up 1.07 per cent.

Across sectors, consumer staples were the biggest gainers, up by 1.65 per cent, followed by financials which gained 1.24 per cent, healthcare up 0.83 per cent and real estate, which gained 0.59 per cent.

Hong Kong shares saw cautious gains, ahead of the US-China talks in Osaka. At the close of trade, the Hang Seng index was up 399.44 points or 1.42 per cent at 28,621.42, adding to the previous day’s 0.1 per cent gain. The Hang Seng China Enterprises index rose 1.22 per cent to 10,897.13.

The sub-index of the Hang Seng tracking energy shares rose 0.5 per cent, while the IT sector rose 1.86 per cent, the financial sector ended 1.51 per cent higher and the property sector rose 0.97 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.87 per cent, while Japan’s Nikkei index closed up 1.19 per cent, at 21,338.17 points.

Tokyo Electron increased 3 per cent, and TDK Corp, Daikin Industries and Subaru Corp rose 4.1 per cent, 5.3 per cent and 4.5 per cent, respectively.


European shares closed flat yesterday, amid uncertainty surrounding US-China trade talks, but German's market was helped by a share rally of chemicals giant Bayer.

The pan-European STOXX 600 index rose as much as 0.4 per cent earlier in the day, but ended down 0.3 per cent to extend its losses into a fourth day.

Germany's trade-sensitive DAX outperformed, up 0.2 per cent, boosted by Bayer's 8.7 per cent rally.

H&M was the biggest gainer on the STOXX 600, up 13.7 per cent on a strong start to summer sales – the overall retail sector gained 2.2 per cent.

Most other European country indexes closed flat.

North America

On Wall Street, the S&P 500 and the Nasdaq closed higher in a broad-based rally, as investors look to the G20 summit in Japan this weekend for progress in the long-running US-China trade dispute, which has whipsawed markets for months.

The benchmark S&P 500 snapped its four-day losing streak, closing on Thursday within 1 per cent of its all-time high, reached a week ago.

The Dow closed slightly lower, dragged down by Boeing.

Optimism fuelled by a China Morning Post report that the world's two largest economies have agreed to a tentative trade war truce was dampened by a Wall Street Journal article saying Chinese President Xi Jinping will present President Donald Trump with a set of conditions to be met by the US before reaching any settlement.

Expectations of a deal were muddied further when White House economic adviser Larry Kudlow said the US may move ahead with further tariffs on Chinese goods after the two leaders meet this weekend at the Group of 20 summit in Japan.

Trump and Xi are expected to discuss a way forward regarding tariffs and other issues when they meet.

The Dow Jones Industrial Average on Thursday fell 10.24 points, or 0.04 per cent, to 26,526.58; the S&P 500 gained 11.14 points, or 0.38 per cent, to 2,924.92; and the Nasdaq Composite added 57.79 points, or 0.73 per cent, to close at 7,967.76.

Of the 11 major sectors in the S&P 500, all but energy stocks ended the session higher.
Chipmakers, whose revenue exposure to China makes them vulnerable to tariffs, ended the session higher. The Philadelphia Semiconductor index rose 1.5 per cent.

Ford Motor advanced 2.9 per cent after the automotive company announced it would cut 12,000 jobs in its troubled Ford Europe segment.

Boeing dropped 2.9 per cent following a Reuters report on Wednesday that the US Federal Aviation Administration had identified a new safety risk in the aircraft manufacturer's grounded 737 MAX aircraft.

Conagra Brands reported quarterly earnings that missed analyst estimates because of waning demand and manufacturing challenges. Its shares fell 12.1 per cent.

Higher drug prices and an increase in prescription volume helped Walgreens Boots Alliance beat quarterly earnings expectations, sending its stock up 4.1 per cent.

is senior editor for Morningstar Australia

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