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Global Market Report - 29 December

Emma Rapaport  |  29 Dec 2021Text size  Decrease  Increase  |  
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Australia

[Morningstar with Dow Jones]: The ASX is poised to rise in line with Wall Street. US stock indexes were mixed Tuesday, a day after a record close for the S&P 500 amid lower liquidity in the last days of the year.

The Australian SPI 200 futures contract was up 39 points or 0.5% at 7331 on December 24, suggesting a positive start to trading.

The S&P 500 swung between small gains and losses, touching a new intraday high in morning trading, after the broad-market index rallied 1.4% on Monday. It finished down 0.1%. The Dow Jones Industrial Average ticked up 0.3% while the Nasdaq Composite fell 0.6%.

The Australian dollar was last buying 72.28 US cents, down 0.14% from the previous close of 72.38. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, grew to 89.92.

Locally, the S&P/ASX 200 closed its shortened pre-Christmas trading session 0.4% higher at 7420.3 on Friday. Almost every sector rose as the benchmark rounded out a 1.6% weekly gain, its strongest since early November.

The heavyweight financial sector added 0.4%, led by AMP. The bank and wealth manager surged 6.4%--making it the ASX 200's best-performing component--after agreeing to the A$428 million sale of its infrastructure debt platform to Ares Management.

Lithium miners Allkem and Pilbara Minerals were the next two best performers, both rising 5.3%, as the materials sector climbed 0.4%. The Australian Securities Exchange reopens today.

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Oil prices ticked up, with global benchmark Brent crude climbing 0.6% to $78.67 a barrel.
The yield on the benchmark 10-year Treasury note was unchanged at 1.480%.

Asia

[Morningstar with Dow Jones]: Chinese stocks ended Tuesday slightly higher, showing signs of improvement from a muted trading pattern in recent days. The benchmark Shanghai Composite Index rose 0.4% to settle at 3630.11, while the Shenzhen Composite Index edged up 0.8% to end at 2514.82.

The ChiNext Price Index gained the most, rising 1.1% to 3328.56. Analysts point to supporting factors including easing Omicron concerns, improving risk appetite, as well as strength in the U.S. market overnight. Home-appliance makers extended their upturn, with Bear Electric jumping 6.5% and robot-vacuum-cleaner company Ecovacs Robotics up 4.8%.

Hong Kong stocks ended the session higher, as the market resumed trading after the Christmas holiday. The benchmark Hang Seng Index rose 0.2% to settle at 23280.56. China Evergrande jumped 9.5% after the developer reported progress on construction at its projects, while its electric-car unit China Evergrande New Energy surged 17% on reports that its first car model has been successfully manufactured. China Cinda jumped 12%, after the state-owned company significantly increased its stake in an Ant Group unit.

Japanese stocks ended higher on thin trading, led by gains in electronics shares, as fears about the Omicron variant receded somewhat. Olympus gained 4.3% and Lasertec advanced 3.2%. The Nikkei Stock Average rose 1.4% to 29069.16. Investors continued to watch for updates on the Covid-19 variant and governments' responses. USD/JPY was at 114.88, compared with 114.89 as of Monday 5 p.m. Eastern Time. The yield on the 10-year Japanese government bond was flat at 0.060%.

Europe

[Morningstar with Dow Jones]: The pan-European Stoxx Europe 600 index rises 0.5% to a one-month intraday high of 488.23, following gains in U.S. stocks late Monday which took the S&P 500 index to another record high. Optimism that the Omicron coronavirus variant won't require severe restrictions has boosted sentiment, though trade is thin with U.K. markets closed for a public holiday.

"The improvement in stock markets reflects the growing confidence that the world can weather the Omicron variant successfully," says Marshall Gittler at BDSwiss.

Oil-linked stocks are among the main risers as oil prices rise, along with tech stocks. Germany's DAX gains 0.7%, France's CAC-40 is up 0.5%, while Italy's FTSE MIB rises 0.8% and Spain's Ibex 35 by 0.7%

North America

[Morningstar with Dow Jones]: US stock indexes were mixed Tuesday, a day after a record close for the S&P 500 amid lower liquidity in the last days of the year.

The S&P 500 swung between small gains and losses, touching a new intraday high in morning trading, after the broad-market index rallied 1.4% on Monday. It finished down 0.1%. The Dow Jones Industrial Average ticked up 0.3% while the Nasdaq Composite fell 0.6%.

Stocks have been buffeted by the spread of the Omicron variant in recent weeks as governments around the world have imposed restrictions to try to curb coronavirus infections. But some recent studies have suggested that the variant might result in milder illness with lower risk of hospitalisation.

The Centers for Disease Control and Prevention reduced the recommended isolation period for some people who test positive to try to minimize disruptions. Still, many economists have lowered their forecasts for economic growth in the first quarter of next year.

Stock investors are keeping eyes on a phenomenon known as the "Santa Claus rally." Indexes such as the S&P 500 have a tendency to rise in the last five days of the year and the first two days of the new year. Such a rally takes place at the end of about four of every five years, according to "Stock Trader's Almanac."

Governments and policy advisers are showing signs of taking a lighter touch with policies regarding the rapidly spreading Omicron variant, reducing quarantine times and in some instances forgoing social-distancing restrictions as they try to keep economies moving.

Vaccine makers gave up gains from earlier in the session, with Novavax declining 1.2% and Moderna down 2.3%.

The news has helped shares of travel and energy companies, with United Airlines up 1.4% and Valero Energy up 1.9%.

Bitcoin slipped around 7% from its level at 5 p.m. ET on Monday, trading around $47,429. The cryptocurrency has oscillated around the $50,000 mark for the past five days.

© 2021 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written content of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").

is the editorial manager for Morningstar Australia. Connect with Emma on Twitter @rap_reports. You can email Morningstar's editorial team editorialAU[at]morningstar[dot]com

© 2022 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'regulated financial advice' under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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