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Global Market Report - 29 October

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

The ASX is set to rise after another batch of strong earnings sent Wall Street higher.

The Australian SPI 200 futures contract was up 18 points or 0.2 per cent higher at 7,422 near 7.00 am AEST on Friday, suggesting a positive start to trading.

US stocks rose Thursday, buoyed by a string of solid earnings reports.

The S&P 500 advanced 1% and the Nasdaq Composite gained 1.4%, with both indexes closing at record highs. The Dow Jones Industrial Average added about 240 points, or 0.7%, to 35730.

Forecast-beating results have helped ease investors' worries that supply-chain difficulties would dent profits, sending stocks higher throughout the month of October. So far this reporting season, with nearly half of S&P 500 companies having posted results, about 82% of companies have managed to beat analysts' expectations for earnings, according to FactSet.

The Australian dollar was buying 75.40 US cents near 7.00am AEST, up from the previous close of 75.16. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, fell to 87.85.

Locally, the S&P/ASX 200 closed 0.25% lower, dragged down by weakness in commodity-related stocks.

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The benchmark followed ASX futures lower after US indices pulled back from record highs, although strength among banking stocks preventing a larger loss. NAB, Commonwealth, ANZ and Westpac rose by between 0.5% and 1.1% as the financial sector edged higher by 0.2%.

Most other sectors lost ground, with energy and materials leading the way amid lower commodity prices. Whitehaven Coal shed 4.95%, while oil producers Santos, Woodside and Beach lost between 1.9% and 2.8%.

Rio Tinto and BHP lost 1.5% and 1.7%, respectively. The ASX 200 is up 0.2% so far this week.

Gold futures rose 0.1% to $US1800.20 an ounce; Brent crude fell 0.04% to $US84.55 a barrel; Iron ore was down 6% at US$112.65.

The yield on the Australian 10-year bond was flat at 1.83%; The US 10-year Treasury note rose to 1.57.

Asia

Chinese stocks finished Thursday down, with the Shanghai Composite Index declining 1.2% to a two-month low, dragged by cyclical sectors. Coal miners were heavily sold off for a second day, as Beijing aims to stabilize coal prices over the long term. Yanzhou Coal shed 10% and Shaanxi Coal slid 7.7%. Oil majors and steelmakers also fell. PetroChina declined 6.2% and Sinopec lost 3.4%.

Hong Kong's Hang Seng Index closed 0.3%, with investors likely focused on major Chinese companies reporting earnings, KGI Securities says. Li Ning led declines, and was down 8.2%, after the sportswear retailer said it will place shares at a discount to raise US$1.4 billion. Ping An Insurance fell 2.4% after reporting earnings.

Japanese shares fell on yen strength and overnight weakness of US stock markets, with the Nikkei Stock Average closing 1.0% lower. Losses on the Nikkei were led by a mixed bag of companies including those that posted weak results.

Europe

European stocks traded mixed after the European Central Bank left interest rates unchanged. The pan-European STOXX 600 index, which tracks the performance of companies across 17 European companies, was up 0.2%.

The rate decision itself wasn't a surprise and the commentary was more important, investment firm Premier Miton says. "The statement reiterates that asset purchases will continue at a 'moderately lower pace' and the support program will continue into the spring,"

Premier Miton's chief investment officer Neil Birrell says. "Again, no surprise. However, it's suggested that inflation may rise above its target and that word 'transitory' is used again."

In London, the FTSE 100 slipped 0.1% as Shell's lower-than-expected profit for the third quarter sent the energy giant deep into the red.

North America

US stocks rose Thursday, buoyed by a string of solid earnings reports.

The S&P 500 advanced 1% and the Nasdaq Composite gained 1.4%, with both indexes closing at record highs. The Dow Jones Industrial Average added about 240 points, or 0.7%, to 35730.

Forecast-beating results have helped ease investors' worries that supply-chain difficulties would dent profits, sending stocks higher throughout the month of October. So far this reporting season, with nearly half of S&P 500 companies having posted results, about 82% of companies have managed to beat analysts' expectations for earnings, according to FactSet.

Apple and Amazon.com are due to report their latest quarterly results after markets close Thursday.

"Earnings growth has been very strong," said Kiran Ganesh, multiasset strategist at UBS Global Wealth Management, adding that investors had also taken comfort from slow progress in Washington toward legislation that would raise taxes on companies and wealthy individuals.

Stocks rose broadly Thursday, with all but one sector of the S&P 500 higher in the afternoon.

Shares of Ford Motor jumped 9.1%. The car maker late Wednesday restored its dividend and raised guidance for profits in 2021.

Caterpillar shares added 3.7% after the manufacturing giant reported better-than-expected earnings, as well as a jump in sales of construction machinery and mining and energy-related equipment.

Shares of Carlyle Group rose 2.4% after the private-equity firm reported a jump in third-quarter earnings.

Twilio, the acquisitive communications software firm, slid 17% after projecting a wider loss for the fourth quarter than analysts had expected.

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

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