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Global Market Report - 29 June

Lewis Jackson  |  29 Jun 2021Text size  Decrease  Increase  |  
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Australia

The ASX is set to open slightly lower as the Nasdaq hits an all time high on a rush back into technology stocks.

The Australian SPI 200 futures contract was down 15 points or 0.21 per cent to 7,190 near 7.30 am Sydney time on Tuesday, suggesting a negative start to trading.

The Nasdaq and S&P 500 have hit all-time highs, fuelled by tech stocks as interest rates remain low, while investors awaited data on the US labour market due on Friday.

The Dow Jones Industrial Average fell 151.56 points, or 0.44 per cent, to 34,282.28, the S&P 500 gained 9.88 points, or 0.23 per cent, to 4,290.58 and the Nasdaq Composite added 140.12 points, or 0.98 per cent, to 14,500.51.

The Australian dollar was buying 75.69 US cents near 7.45am AEST, down from 75.95 at Monday’s close.

Locally, investors piled into online retail and supermarket stocks tipped to profit from new coronavirus lockdowns in Australia, and abandoned travel providers.

Luxury goods trader Cettire and furniture provider Temple & Webster gained more than 10 per cent on the first day of trading in a two-week lockdown for Sydney and surrounds.

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Darwin and nearby regions had a lockdown extended to five days, while mask and capacity limits were raised elsewhere on fears the Sydney outbreak has spread.

Investors bailed on travel stocks, expecting travel restrictions to decimate sales.

Qantas and Webjet lost more than four per cent.

The benchmark S&P/ASX200 index closed lower by 0.7 points, or 0.01 per cent, to 7307.3 on Monday.

The All Ordinaries closed down by 6.1 points, or 0.08 per cent, to 7572.5.

The results were largely consistent with markets in Asia, where several countries are verging on more virus restrictions.

Indonesia is battling record high cases. A lockdown in Malaysia is set to be extended. Thailand set new virus rules for Bangkok.

A good lead from the US may have prevented noteable losses.

The S&P 500 ended last week at a record high after weaker-than-expected inflation data.

Investors may have been less worried about the Federal Reserve winding back support for the economy.

US payrolls data for June, due at the end of the week, will be closely watched.

Analysts expect unemployment to drop to 5.7 per cent, which could raise investor fears that the central bank may ease support.

On the ASX, Woolworths rose 2.91 per cent to $37.85 after shoppers in NSW and the Northern Territory filled supermarkets in panic buying.

The retail giant's gains helped consumer staples shares be the best performers. They rose 1.48 per cent.

Cettire was best of the online retailers and gained 14.04 per cent to $2.68.

Kogan, which had roaring success last year from people shopping at home, rose 6.56 per cent to $13.00.

However technology shares fared worst and dropped 2.81 per cent.

Afterpay lost 7.52 per cent to $119.30.

In mining, BHP after trading closed said it sold its 33.3 per cent stake in Colombian coal joint venture Cerrejon.

BHP sold the stake to Glencore for $US294 million.

The biggest miner on the ASX also fared best of the big three and rose 1.04 per cent to $48.40.

In banking, Westpac sold its car dealer financing and leasing businesses to Angle Finance.

Shares closed lower by 0.27 per cent.

IGA Supermarkets owner and distributor Metcash has reported record annual sales and will buy back shares.

The sales momentum for the 2021 fiscal year ended April has continued in the first eight weeks of the new year, as consumers continued to spend heavily on food, liquor and hardware.

Metcash reported a bottom-line net profit of $239 million for fiscal 2021.

Shareholders will receive a final full franked dividend of 9.5 cents per share. This is higher than the previous final dividend of 0.065 cents per share.

The company will buy back shares off-market up to the value of $175 million.

Shares on the ASX were up 0.82 per cent to $3.69.

Spot Gold was down 0.2 per cent at $US1778.77 an ounce; Brent crude was down 2.2 per cent at $US74.54 a barrel, Iron ore was up 1.0 per cent at $US 218.62 a tonne.

The yield on the Australian 10-year bond closed at 1.58 per cent.

Asia

At the close, China's Shanghai Composite index was down 0.03 per cent at 3,606.37.

The Hang Seng index, used to record and monitor daily changes of the largest companies of the Hong Kong stock market, was down 0.07 per cent, to 29,268.30.

Japan's Nikkei 225 Index was down 0.66 per cent at 29,048.02.

Europe

The pan-European STOXX 600 index, which tracks the return of the largest listed companies across 17 European countries, was down 0.59 per cent at 454.94.

The German DAX fell 0.34 per cent to 15,554.18.

North America

The Nasdaq and S&P 500 have hit all-time highs, fuelled by tech stocks as interest rates remain low, while investors awaited data on the US labour market due on Friday.

The Dow Jones Industrial Average fell 151.56 points, or 0.44 per cent, to 34,282.28, the S&P 500 gained 9.88 points, or 0.23 per cent, to 4,290.58 and the Nasdaq Composite added 140.12 points, or 0.98 per cent, to 14,500.51.

Big tech companies including Facebook Inc, Apple Inc , Amazon.com Inc and Nvidia Corp were among the biggest boosts to the S&P 500 and the Nasdaq.

Facebook gained over 4.0 per cent as a US judge granted the company's motion to dismiss a Federal Trade Commission lawsuit.

The social media giant touched $US1 trillion ($A1.3 trillion) in market cap on Monday.
In contrast, cyclical sectors dropped sharply amid fears over a spike in COVID-19 cases across Asia.

Financials, energy and airlines fell sharply.

Technology led the biggest sectoral gains on S&P.

"It's end of the quarter and investors may want to take some profits and rotate out of energy and stick with tech, which has been the winner," said Sam Stovall, chief investment strategist at CFRA Research in New York.

Stovall expects stocks should continue their near-term climb as investors await the new earnings season in which year-over-year earnings growth of S&P 500 companies is expected to top 60 per cent.

The S&P 500 on Friday logged its best weekly performance in 20 weeks, following a bipartisan agreement on a $US1.2 trillion US infrastructure spending deal and waning concerns about a sooner-than-expected policy tightening from the Federal Reserve.

Both the S&P 500 and the Nasdaq hit a series of record highs last week.

The tech-heavy Nasdaq's 5.0 per cent gain in June is outpacing its peers as investors pile back into tech-oriented growth stocks on diminishing worries about runaway inflation.

"We believe with the Fed putting a realistic goal post, investors now have much more of a risk-on mentality going into the second half of the year. A lot of these tech names have underperformed, while fundamentals were very robust going into the June quarter," said Wedbush Securities analyst Daniel Ives.

With the S&P 500 up almost 14 per cent as the first half of 2021 draws to a close, activity in some areas of the market indicates concern over potential volatility, with some investors suggesting the market may be overdue for a significant pullback.

On the economic front, investor attention will be focused on consumer confidence data, a private jobs report and a crucial monthly employment report due later this week.

Quarterly results from Micron Technology Inc and Walgreens Boots Alliance are also slated for this week.

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

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