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Global Market Report - 29 March

Lex Hall  |  29 Mar 2019Text size  Decrease  Increase  |  
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Australia

Australian shares are expected to open flat after tepid gains on Wall Street overnight as Treasury yields rose off 15-year lows.

The SPI200 futures contract was down just 1 point, or 0.02 per cent, at 6,167.0 at 8am Sydney time, suggesting a marginal dip for the benchmark S&P/ASX200 on Friday.

Australian shares rebounded yesterday from a broad slump to close up slightly for a second day in a row.

After dropping below 6100 mark for the first time in over a month in the morning the benchmark S&P/ASX200 bounced back in the afternoon, closing up 5.4 points, or 0.09 per cent, to 6,136 on Wednesday. The broader All Ordinaries closed up 4.5 points, or 0.07 per cent, at 6,217.

On Wall Street, the Dow Jones Industrial Average was up 0.36 per cent, the S&P 500 was up 0.36 per cent and the tech-heavy Nasdaq Composite was up 0.34 per cent.

The Aussie dollar is buying 70.77 US cents from 71.00 US cents on Thursday.

Out today: ANZ consumer confidence for March.

ASIA

Chinese shares ended weaker on Thursday as lingering concerns over the economy and trade weighed on investor sentiment, despite government pledges to open markets and indications of progress in US-China trade talks.

At the close, the Shanghai Composite index was down 0.92 per cent at 2,994.94.
The blue-chip CSI300 index was down 0.4 per cent, with its financial sector sub-index lower by 0.86 per cent and the real estate index down 1.3 per cent.

Bucking the broader trend, healthcare shares ended up 0.26 per cent and a sub-index tracking the consumer staples sector rose 1.86 per cent, as distiller Wuliangye Yibin climbed to a 14-month high on robust profit growth

Hong Kong shares clawed back from losses to close slightly higher on Thursday. At the close of trade, the Hang Seng index was up 46.96 points, or 0.16 per cent, at 28,775.21. The

Hang Seng China Enterprises index fell 0.09 per cent to 11,294.81.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.15 per cent, while Japan’s Nikkei index closed down 1.61 per cent.

EUROPE

European shares pared early gains to finish lower on Thursday as optimism around some progress in US-China trade talks were outweighed by losses in banks amid a gloomy outlook for global economic growth and uncertainties around Brexit.

The pan-region STOXX 600 index slipped 0.1 per cent, with Frankfurt’s trade-sensitive index DAX giving up most gains to close 0.08 per cent lower, while Madrid and Milan slipped more than half a per cent each.

The pullback intensified after data showed that economic growth in the US slowed more than expected in the fourth quarter - the latest addition to a slew of poor economic data from around the globe.

The 0.6 per cent rise in London’s FTSE 100 was the most among regional indices, spurred by a weaker pound after Wednesday’s indicative vote on Brexit ended in a deadlock.

Efforts to persuade politicians to back British Prime Minister Theresa May’s deal continue with a parliamentary debate scheduled for Friday amid reports that it will not be a so-called ‘Meaningful Vote’, making the rounds.

European banking stocks fell the most on the pan-region index as bond yields continued to decline, keeping alive fears of a slowing global economy. London’s Prudential PLC gave up 2.3 per cent.

NORTH AMERICA

US stocks have climbed as Treasury yields rose off 15-year lows, with investors optimistic about the latest round of US-China trade talks.

But the day's advance was limited by concerns about economic data.

The domestic economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the 3 per cent annual target, and corporate profits failed to rise for the first time in more than two years.

Worries about economic growth hit markets last week after the Federal Reserve abandoned projections for any interest rate hikes this year and the US Treasury yield curve inverted for the first time since 2007.

Benchmark 10-year yields rose off 15-month lows but the yield curve between three-month bills and 10-year notes remained inverted. If it persists, the inverted yield could indicate that a recession is likely in one to two years.

Senior US officials arrived in Beijing on Thursday for a fresh round of trade talks, which will be followed by a round in Washington next week. Trade-sensitive industrial stocks rose 0.8 per cent and were among the day's top-performing sectors.

On Wednesday, US officials told Reuters China had made unprecedented proposals in talks on a range of issues, including forced technology transfer, as the countries work to overcome the remaining obstacles to a deal to end their trade war.

The Dow Jones Industrial Average rose 91.87 points, or 0.36 per cent, to 25,717.46, the S&P 500 gained 10.07 points, or 0.36 per cent, to 2,815.44 and the Nasdaq Composite added 25.79 points, or 0.34 per cent, to 7,669.17.

Consumer discretionary stocks rose 0.6 per cent, helped by gains in shares of clothing firm PVH Corp. Calvin Klein's owner forecast full-year adjusted profit and sales above Wall Street's expectations.

is content editor for Morningstar Australia

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