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Global Market Report - 28 June

Lewis Jackson  |  28 Jun 2021Text size  Decrease  Increase  |  
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Australia

Australian shares are set to edge higher after the S&P hit a record high for the week as inflation fears subsided.

The Australian SPI 200 futures contract was up 5 points or 0.07 per cent to 7,212 near 7.30 am Sydney time on Monday, suggesting a positive start to trading.

The S&P 500 ended the week at a record high, lifted by Nike and several banks, while weaker than expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.

The Dow Jones Industrial Average rose 0.69 per cent to end at 34,433.84 points while the S&P 500 gained 0.33 per cent to 4,280.69 and the Nasdaq Composite dropped 0.06 per cent, to 14,360.39.

For the week, the S&P 500 gained 2.7 per cent, the Dow added 3.4 per cent and the Nasdaq gained 2.4 per cent.

The Australian dollar was buying 75.86 US cents near 7.45am AEST, down from 75.91 at Friday’s close.

Locally, investors had their first week of losses in the past six on Friday while keenly awaited US inflation data could prompt more erratic trading.

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Some optimistic trade at the end of the week did not prevent losses of 0.83 per cent for the five-day stretch.

The benchmark S&P/ASX200 index on Friday closed higher by 32.7 points, or 0.45 per cent, to 7308.

The All Ordinaries closed up by 39.5 points, or 0.52 per cent, to 7578.6.

Investors gave ASX materials shares a one per cent rise after the US government agreed to spend $US1.2 trillion ($A1.6 trillion) on roads, airports, broadband and more.

US President Joe Biden's plan to further stimulate the US economy out of its pandemic funk also helped US markets higher.

Yet the economy's strong recovery has made inflation a concern for investors.

US inflation for the 12 months through May was five per cent, the biggest year-on-year increase since August 2008.

Some Federal Reserve officials last week flagged rate rises may occur as early as 2023.
The inflation story will unfold further when another measure of May prices is published overnight.

IG Markets analyst Kyle Rodda said a higher than expected reading could prompt stock market volatility and a higher US dollar.

ASX traders will face the fallout on Monday.

Meanwhile, people in Sydney's city centre will begin a one-week lockdown as health workers deal with a developing coronavirus outbreak.

People who live and work in four council areas have been told to stay home after 22 more infections were found across Sydney.

People from Sydney or NSW remain barred from travelling to most states and territories.
The Seven Group has increased its offer for a bigger chunk of Boral.

Seven is offering $7.30 per share if allowed to increase its stake in the materials supplier by five per cent to 29.5 per cent.

Seven will pay $7.40 per share if allowed to increase its stake by 10 per cent to 34.5 per cent.

Boral directors have yet to respond to the offer, which is valid to July 2.

Investors pushed Seven shares on the ASX down 2.64 per cent to $20.30.

Boral shares were up 6.38 per cent to $7.34.

The former Woolworths business Endeavour Group improved on its first full day of share trading.

The demerged entity, which owns the BWS and Dan Murphy's stores, closed up 1.33 per cent to $6.10.

Woolworths was down 2.57 per cent to $36.78. The retail giant lost 11.2 per cent on Thursday.

Consumer staples shares were the worst performers on Friday and shed 0.93 per cent.

The miners were strong and all gained in the wake of the US infrastructure deal.

BlueScope Steel gained 2.63 per cent to $22.26.

BHP climbed 0.63 per cent to $47.90. Fortescue was higher by 0.79 per cent to $22.92. Rio Tinto was better by 0.69 per cent to $125.22.

Westpac paid an interim dividend of 58 cents per share.

The bank closed better by 0.23 per cent to $25.89.

Its peers in the big four all gained by less than one per cent.

Market giant CSL finished a poor week down by 0.52 per cent to $285.13. The biotech lost more than six per cent this week.

Southern Cross Media gained 6.53 per cent to $2.12 after a deal to show Network 10 programs.

The broadcaster will show four channels from Network 10 in regional Queensland and regional Victoria, as well southern NSW, for two years.

Spot Gold was up 0.4 per cent at $US1781.44 an ounce; Brent crude was up 0.8 per cent at $US76.18 a barrel, Iron ore was up 1.4 per cent at $US 216.45 a tonne.

The yield on the Australian 10-year bond closed at 1.56 per cent.

Asia

At the close, China's Shanghai Composite index was up 1.15 per cent at 3,607.56.

The Hang Seng index, used to record and monitor daily changes of the largest companies of the Hong Kong stock market, was up 1.40 per cent, to 29,288.22.

Japan's Nikkei 225 Index was up 0.66 per cent at 29,066.18.

Europe

The pan-European STOXX 600 index, which tracks the return of the largest listed companies across 17 European countries, was up 0.13 per cent at 457.63.

The German DAX rose 0.12 per cent to 15,607.97.

North America

The S&P 500 has ended the week at a record high, lifted by Nike and several banks, while weaker than expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.

The Dow Jones Industrial Average rose 0.69 per cent to end at 34,433.84 points while the S&P 500 gained 0.33 per cent to 4,280.69 and the Nasdaq Composite dropped 0.06 per cent, to 14,360.39.

For the week, the S&P 500 gained 2.7 per cent, the Dow added 3.4 per cent and the Nasdaq gained 2.4 per cent.

Nike Inc surged 15.5 per cent to an all-time high after the sneaker maker forecast fiscal full-year sales ahead of Wall Street estimates, helping the Dow lead among the three main indexes.

Bank of America climbed 1.9 per cent and Wells Fargo rallied 2.7 per cent after the Fed announced big banks have cleared stress tests and will no longer face pandemic-related restrictions on buying back stock and paying dividends.

The S&P 500 financials index rose 1.3 per cent and was the top performer among 11 sector indexes.

"Today is a bit of profit-taking in tech and a reallocation into the banks after the results of the stress tests," said Dennis Dick, a proprietary trader at Bright Trading LLC, adding he expects banks to soon announce increased dividends.

A bipartisan Senate deal on infrastructure spending embraced by US President Joe Biden on Thursday continued to lift stocks, with the materials and industrials indexes increasing and helping the S&P 500 outperform the Nasdaq.

"The positive news from the infrastructure package favours the S&P 500 more than then Nasdaq. The Nasdaq does not pour cement into roads and put steel in bridges. That's the S&P 500," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The latest personal consumption expenditures (PCE) data showed a measure of underlying inflation rose less than expected in May.

Core PCE rose 3.4 per cent year-over-year as expected, above the Fed's 2.0 per cent flexible target.

Billionaire Richard Branson's spaceship company Virgin Galactic soared almost 40 per cent and was Wall Street's second most traded company after receiving approval from the US aviation safety regulator to fly people to space.

With the FTSE Russell reconstituting its indexes following a wild trading year marked by the pandemic and a "meme" stocks, volume on US exchanges surged to 15.1 billion shares, versus the 11.2 billion average over the last 20 trading days.

It was the S&P 500's strongest week since early February and the Nasdaq's strongest since April.

FedEx Corp dropped 3.6 per cent after the US delivery firm missed 2022 earnings forecast due to hiring difficulties.

CarMaxe Inc jumped 6.7 per cent after the used-car retailer topped Wall Street estimates for quarterly revenue, helped by strong demand as more people opted for personal vehicles over public transport due to the COVID-19 pandemic.

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

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