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 - 29 February

Lex Hall  |  28 Feb 2020Text size  Decrease  Increase  |  
Email to Friend

Australia

Australian stocks are poised to extend their losses to a fifth day after another rout on most global markets.

The SPI200 futures contract was down 164 points, or 2.48 per cent, at 6452 at 8am Sydney time on Friday, pointing to another sharp fall when the local market opens.

By Thursday's close, shares on the benchmark index had fallen to levels last seen on 5 December as $170 billion in value was wiped from the market.

Global markets continued to fall overnight as the growth in coronavirus cases outside China jumped significantly on Thursday.

Wall Street’s main indexes plunged on Thursday in their sixth straight day of declines with the S&P 500 confirming its fastest correction in history as the rapid global spread of coronavirus intensified investor worries about economic growth.

The Dow Jones Industrial Average fell 1197.43 points, or 4.44 per cent, to 25,760.16, the S&P 500 lost 4.43 per cent and the Nasdaq Composite dropped 4.61 per cent.

Harvey Norman and Rural Funds Group are among the local companies reporting their earnings on Friday.

The Aussie dollar was buying 65.80 US cents at 8am, up from 65.50 US cents at the market close on Thursday.

Asia

Chinese shares rose slightly on Thursday as the country reported fewer deaths due to the coronavirus and signalled more support to underpin the domestic economy, although increasing worries over the global contagion of the virus kept gains in check.

The benchmark Shanghai Composite index ended 0.1 per cent higher at 2991.33 points and the blue-chip CSI300 index finished up 0.3 per cent at 4084.88 points.

Hong Kong stocks reversed earlier losses to end higher on Thursday, after Beijing indicated more support to bolster its economy pressured by the coronavirus outbreak.

At the close of trade, the Hang Seng index was up 82.13 points or 0.31 per cent at 26,778.62.

Japan’s benchmark Nikkei fell for a fourth day on Thursday, as investors were spooked by the rapid expansion of the global coronavirus outbreak, with the United States reporting its first possible community spread.

The Nikkei share average tumbled 2.13 per cent to a 4½-month low of 21,948.23, finishing below a major support of its 200-day moving average, at 22,195, for the first time since early September.

Europe

European shares fell again on Thursday, with travel stocks bearing the brunt, as a jump in coronavirus cases outside of China deepened fears of a looming pandemic that could dent global growth.

Heightening the concerns were profit warnings from blue-chip companies. Standard Chartered tumbled 3.7 per cent after the bank said a key earnings target would take longer to meet as the epidemic adds to headwinds in its main markets of China and Hong Kong.

Anheuser-Busch InBev plunged 8 per cent after the world’s largest beer maker forecast muted growth in 2020 due in part to the outbreak.

The pan-regional STOXX 600 index fell 1.7 per cent in its sixth day of declines in the past seven, putting the benchmark on course for the biggest weekly decline since May 2011.

Travel & leisure stocks slumped 3.2 per cent, down for the sixth straight session, as airlines and hotel groups dropped on concerns over demand.

Europe’s media index took a knocking as advertising major WPP tumbled 16 per cent, on track for its worst day since August 1992, after saying it would target flat organic growth and profit margin in 2020. Shares in rival Publicis Groupe fell 2.8 per cent

Banking stocks, miners and retail stocks all dropped about 2.5 per cent.

Italian shares fell as the country reported another 100 cases nationwide, taking the total in Europe's worst-hit region to more than 400.

Governments ramped up measures to battle a looming global pandemic as the number of infections outside China, the source of the outbreak, for the first time surpassed those appearing inside the country.

Meanwhile, euro zone money markets have started to fully price in a December European Central Bank interest rate cut as expectations for more stimulus ramp up.

British household goods maker Reckitt Benckiser was among the few gainers, up 1.3 per cent, after it launched a corporate revamp that will invest 2 billion pounds in its business over three years.

North America

Wall Street’s main indexes plunged on Thursday for the sixth straight session, with the S&P 500 confirming its fastest correction in history as the rapid global spread of coronavirus intensified worries about economic growth.

The S&P 500 finished 12 per cent below its 19 February record close, marking its fastest correction ever in just six trading days. The previous record was nine days in early 2018, according to S&P Dow Jones Indices analyst Howard Silverblatt.

The Dow registered a record one-day points drop, which was also its fourth 1,000-point decline in history and the second this week.

All three major US indexes were also on track for their steepest weekly pullback since the global financial crisis, as new infections reported around the world surpassed those in mainland China.

Governments battling the epidemic from Iran to Australia shut schools, cancelled big events and stocked up on medical supplies. In the US, the Centers for Disease Control and Prevention late Wednesday confirmed an infection of unknown origin in California.

While selling eased for a while during the session the S&P’s losses deepened rapidly in the last hour of trading to end at a session low, registering its biggest one-day percentage loss since 18 August 2011.

The CBOE volatility index, also known as the fear index, ended near its session high, up 11.60 points at 39.16, its highest level since February 2018.

The Dow Jones Industrial Average fell 1,190.95 points, or 4.42 per cent, to 25,766.64, the S&P 500 lost 137.63 points, or 4.42 per cent, to 2,978.76 and the Nasdaq Composite dropped 414.30 points, or 4.61 per cent, to 8,566.48.

The Dow ended 12.8 per cent below its 12 February record close and Nasdaq closed 12.7 per cent under its Feb. 19 closing peak.

All of the 11 S&P sectors closed lower with real estate, technology and energy sectors all losing more than 5 per cent. The best performers were the healthcare and industrials sectors, which all closed down more than 3 per cent.

The NYSE Arca Airline index ended down 5.7 per cent on fears about travel disruptions around the world, while the Philadelphia SE Semiconductor index, which includes China-exposed stocks, fell 4.7 per cent.

Industry analysts and economists continued to sound the alarm as they assessed the fallout of the outbreak, with Goldman Sachs saying US firms will generate no earnings growth in 2020.

Microsoft Corp, the biggest drag on the S&P, dropped almost 7 per cent after it warned of weakness in PC business due to a hit to its supply chain from the coronavirus, echoing similar statements from Apple Inc and HP.

While it was the biggest boost for the S&P, 3M Co pared gains sharply as the day wore on, ending up just 0.8 per cent at $150.16 after rising as high as $155.43. An analyst had upgraded the stock, citing possible benefit from higher sales of respirator masks during the outbreak.

In the busiest trading session at least since July 2014, according to data from Refinitiv, 15.63 billion shares changed hands on US exchanges on Thursday compared with the average 8.67 billion for the last 20 sessions.

is content 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