Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Global Market Report - 28 May

Lex Hall  |  28 May 2019Text size  Decrease  Increase  |  
Email to Friend

Australia

The Australian share market is expected to open flat.

The SPI200 futures contract was down 2 points, or 0.03 per cent, at 6,461.0 at 7am Sydney, suggesting a subdued start for the benchmark S&P/ASX200 on Tuesday.

The Australian share market closed flat  yesterday, with gains for tech stocks and the major mining companies slightly outweighed by a decline in telecom and consumer staples shares.

The benchmark S&P/ASX200 index closed down 4.1 points, or 0.06 per cent to 6,451.9 points on Monday, while the broader All Ordinaries was down 0.8 points, or 0.01 per cent, to 6,544.8.

Financial markets were closed overnight in the UK and US for a bank holiday and for Memorial Day respectively.

The Aussie dollar is buying 69.18 US cents from 68.33 US cents on Monday.

Asia

The Chinese stock market climbed on Monday, rebounding from its three-month lows, as investors expected greater policy support to offset impact from US tariffs and cooling domestic demand.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

At the close, the Shanghai Composite index was up 1.4 per cent at 2,892.38, while the blue-chip CSI300 index gained 1.2 per cent. Both indexes bounced from their lowest since January 22, hit earlier in the session.

Hong Kong stocks eased on Monday, as investors stayed on the sidelines awaiting hints of further policy support to offset impacts of US-China trade war and cooling domestic demand, amid worries about the economy.

At the close of trade, the Hang Seng index was down 65.84 points, or 0.24 per cent, at 27,288.09.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.1 per cent, while Japan’s Nikkei index closed up 0.3 per cent.

Europe

European shares rose on Monday, led by car-makers after Fiat Chrysler and Renault confirmed they were in talks to merge, while broader trading was mainly driven by regional politics.

The STOXX 600 index rose 0.2 per cent, with most countries’ bourses posting gains after results of European parliamentary elections showed strong support for pro-European Union parties.

However, with UK and US markets closed for holidays, liquidity was shallow and STOXX 600 trading volumes were the lowest seen since late August.

The calling of a snap election by Greek Prime Minister Alexis Tsipras boosted sentiment after the ruling leftist Syriza party endured a heavy defeat in the European election.

Athens-traded stocks surged 6.1 per cent, for their best day since February 2016, on hopes that a new government would be more business friendly than the current one.

Trading volumes in Greek stocks, which were already Europe’s best performers in the year to Friday’s close, were more than three times their 90-day average.

Austrian stocks recovered from earlier losses to end flat on the day after Chancellor Sebastian Kurz’s government was ejected from office in the aftermath of a video sting scandal.

Fiat Chrysler pitched a finely-balanced merger of equals to France’s Renault in an attempt to create the world’s third-largest automaker, sending the two companies’ shares up 8 per cent and 12.1 per cent, respectively. The auto and parts makers index rose 1.4 per cent.

Peugeot S.A. fell 3.3 per cent, a move some analysts put down to Fiat preferring to seek a merger with Renault.

Stocks in Milan dipped 0.1 per cent, led by a 1.3 per cent fall in the local banking index after a report said Brussels was considering disciplinary action over Rome’s failure to rein in public debt.

UniCredit fell 2.3 per cent to its lowest close in more than 3½ months. 

North America

US markets were closed for the Memorial Day holiday.

Gold hit a more than one-week peak overnight as trade tensions between the US and China lifted appetite for assets seen as a haven from risk, while weak US economic data boosted hopes for a rate cut from the Federal Reserve.

Spot gold inched up half a per cent to $US1,285.34 per ounce.

The metal touched $US1,287.32 earlier in the session, its highest level since May 17.

US gold futures were 0.1 per cent higher at $US1,284.40 an ounce.

US President Donald Trump said on Monday he was "not yet ready" to make a deal with China, hinting that the world's biggest economies are far from a trade agreement.

The Chinese government on Friday denounced US Secretary of State Mike Pompeo for fabricating rumours after he said the chief executive of China's Huawei Technologies Co Ltd was lying about his company's ties to the Beijing authorities.

Weak manufacturing activity data coupled with a dip in new orders for US-made capital goods last week ignited worries that the trade conflict may hurt the world's largest economy, lifting investor expectations for a US rate cut.

Over the weekend, Trump reiterated a complaint that the Fed's policies had kept US economic growth from reaching its full potential.

Investors also eyed European Parliament elections, where a two-party "grand coalition" of the conservative European People's Party and the Socialists lost their combined majority after a surge in support for liberals, the Greens and EU-sceptic nationalists.

"The rise of volatility triggered by geopolitics benefited the yellow metal," Alfonso Esparza, senior market analyst at OANDA, said in a note.

"If the UK political game of thrones and US-China trade keep uncertainty levels high, gold could once again jump above $US1,300."

Gold may retest resistance at $US1,290 an ounce, a break above which could lead to a gain to the next resistance at $US1,295, Reuters technical analyst Wang Tao said.

is senior editor for Morningstar Australia

AAP logo

© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend