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Global Market Report - 28 March

Lex Hall  |  28 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open flat after a negative lead from major overseas markets.

The SPI200 futures contract was completely flat at 6,113.0 at 8am Sydney time, suggesting an unchanged start for the benchmark S&P/ASX200 on Thursday.

Australian shares yesterday closed slightly higher, 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 down 0.13 per cent, the S&P 500 was down 0.46 per cent and the tech-heavy Nasdaq Composite was down 0.63 per cent.

The Aussie dollar is buying 70.87 US cents from 71.02 US cents on Wednesday.

ASIA

China stocks closed higher on Wednesday following two straight sessions of losses, as a rebound on Wall Street aided sentiment, while weak industrial profit data fuelled hopes for more stimulus.

The blue-chip CSI300 index ended up 1.2 per cent at 3,743.39, while the Shanghai Composite Index gained 0.9 per cent to 3,022.72 points.

China’s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed, as increasing strains on the economy in the face of slowing demand at home and abroad took a toll on businesses.

The Shanghai Composite gained 0.85 per cent and the Hang Seng rose 0.56 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.06 per cent, while Japan’s Nikkei index closed down 0.23 per cent.

EUROPE

European shares fell on Wednesday, handing back early gains as bond yields continued to flag recessionary fears and investors awaited indicative votes on a series of alternate Brexit options in parliament.

German 10-year yields, already below zero percent since last Friday, fell further in negative territory, while the US bond yield curve remained inverted - a key signal of recession - dampened appetite for risk.

The pan-region STOXX 600 index fell 0.4 per cent as indexes slipped across the region, led by bourses in Paris and London.

The moves were reminiscent of late last week, when investors ditched equities to run to the safety of bonds after weak European and US data on Friday stoked global growth fears.

Defensives such as utilities, real estate and healthcare stocks slipped the most on the STOXX.

London’s FTSE 100 fell 0.5 per cent ahead of a closely watched vote by British politicians on a range of options on how to overcome the political impasse over Brexit.

NORTH AMERICA

US stocks have eased as Treasury bond yields fell again and a prolonged inversion in the yield curve fanned fears of a US economic slowdown.

Benchmark 10-year Treasury yields slid on Wednesday, but came off 15-month lows reached overnight, as investors remained focused on central bank dovishness globally.

The yield curve inverted for the first time since 2007 on Friday and, if the inversion persists, some experts say it could indicate a recession is likely in one to two years.

Bank and financial stocks fell, with the S&P 500 financial index ending down 0.4 per cent.
Worries about global growth have risen recently amid weak economic data, and the Federal

Reserve last week abandoned projections for any interest rate hikes this year.

The European Central Bank became the latest central bank to delay a planned increase in rates amid rising threats to growth.

The Dow Jones Industrial Average fell 32.14 points, or 0.13 per cent, to 25,625.59, the S&P 500 lost 13.09 points, or 0.46 per cent, to 2,805.37 and the Nasdaq Composite dropped 48.15 points, or 0.63 per cent, to 7,643.38.

Lennar Corp rose 3.9 per cent as the No 2 US homebuilder said it expected the housing market to improve, while shares of KB Home, which reported upbeat results late Tuesday, were up 2.7 per cent.

Also helping was a survey that showed mortgage applications in the week ended 22 March rose nearly 9 per cent amid lower interest rates, according to the Mortgage Bankers Association.

Centene Corp's shares fell 5 per cent after the health insurer said it would buy smaller rival WellCare Health Plans for $US15.27 billion. Shares of WellCare jumped 12.3 per cent.

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