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 - 30 April

Lex Hall  |  30 Apr 2020Text size  Decrease  Increase  |  
Email to Friend

Australia

Shares on the Australian market are set for gains after US stocks surged overnight following promising results for a COVID-19 treatment.

The Australian SPI 200 futures contract was up 108 points, or 2.01 per cent, at 5,468.0 points at 8am Sydney time on Thursday.

ANZ Bank has announced it will delay paying shareholders an interim dividend after first-half cash profit plunged 62 per cent to $1.32 billion.

The fall in profit was due to higher credit charges and COVID-19 impairments.

Overnight, big tech companies provided the biggest lift to the US S&P 500 and the Nasdaq, and pushed all three major US stock averages closer to their all-time highs reached in February.

Drugmaker Gilead Sciences announced that its drug Remdesivir is showing promise as an effective treatment for COVID-19, which has killed more than 226,000 people across the world.

The news boosted the broader market and sent Gilead shares up 5.7 per cent.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

The Dow Jones Industrial Average rose 2.21 per cent, to 24,633.86, the S&P 500 gained 2.66 per cent, to 2,939.51 and the Nasdaq Composite added 3.57 per cent, to 8,914.71.

Elsewhere on the home front, Bank of Queensland will publish first half results.

Woolworths is scheduled to provide its third quarter supermarket sales update, which would likely have been boosted by panic-buying from the coronavirus pandemic.

Rival Coles on Wednesday reported third quarter supermarket sales jumped by 13 per cent, but its share price finished 4.4 per cent lower when the market closed.

The S&P/ASX200 benchmark index finished higher on Wednesday, closing up 80.3 points, or 1.51 per cent, at 5,393.4.

The All Ordinaries index finished 82.6 points higher, or 1.53 per cent, at 5,463.8.

One Aussie dollar was buying 65.57 US cents at 8am, up from 65.36 US cents at Wednesday's close.

Asia

China shares settled higher on Wednesday after the country’s biggest listed banks posted solid first-quarter profits, and as investors saw signs of lockdown easing, but lingering worries over the coronavirus pandemic capped gains.

At the close, the Shanghai Composite index was up 0.44 per cent at 2,822.44. The blue-chip CSI300 index ended 0.46 per cent higher. 

The gains were driven by banking shares after China’s big four lenders reported higher profits for the first quarter despite the impact of the pandemic.

In Hong Kong, the Hang Seng index was up 67.63 points, or 0.28 per cent, at 24,643.59.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.98 per cent, while Japan’s Nikkei index closed down 0.06 per cent.

Europe

European stocks rose on Wednesday, as positive developments regarding a potential COVID-19 treatment bolstered a rally in banks and oil stocks and shares in sensor specialist AMS jumped on upbeat earnings.

Global sentiment got a boost after US drugmaker Gilead Sciences said its experimental antiviral drug remdesivir helped improve symptoms for COVID-19 patients who were given the drug early.

“Risk appetite is roaring back on news that... remdesivir met the primary endpoint,” said Edward Moya, senior market analyst at OANDA, New York.

“But traders need to exercise some caution as (the drug) has yet to be proven safe nor effective in treating COVID-19.”

The pan-European STOXX 600 closed up 1.8 per cent with shares of Airbus surging 10 per cent even as its quarterly profits plunged. The planemaker’s shares hit session highs after US rival Boeing also reported quarterly losses.

Oil giants BP, Total and Royal Dutch Shell advanced more than 3 per cent each as crude prices climbed on the back of a lower-than-expected rise in US stockpiles.

Automakers were buoyed after German carmaker Daimler forecast operating profit at its Mercedes-Benz Cars & Vans division rising in 2020, and rival Volkswagen said it expected to be profitable on a full-year basis.

German shares surged almost 3 per cent.

Barclays and Asia-focused Standard Chartered drove a rally in banks. StanChart expects its main markets to lead global economic recovery from the COVID-19 crisis as early as later this year, while a Barclays’ investment bank cushioned the blow for the British bank.

Topping the STOXX 600 was sensor specialist AMS, up 24.4 per cent after saying it expected the impact from the coronavirus in the second quarter to be limited.

European shares have recouped nearly half of their losses since the February rout as many countries move to restart their economies following weeks-long lockdowns to curb the spread of the coronavirus.

With global economic activity nearly halted in April analysts are, however, predicting a sharper slump in second-quarter earnings. Latest data from Refinitiv pointed to a 40.4 per cent decline in profits during the period for companies listed on the STOXX 600 versus 37 per cent a week ago.

Healthcare stocks fell 1.6 per cent.

Banks drove Italy's stocks benchmark up 2.2 per cent, helping it shrug off rating agency Fitch downgrading the country's credit rating to just one notch above junk.

Wirecard shares continued to slide after a prominent short seller demanded the sacking of CEO Markus Braun following a special audit of the German payments company that was unable to verify its financial statements.

All eyes will be on the release of the US Federal Reserve’s statement later in the day. Expectations are also high for more stimulus from the European Central Bank, which is due to meet on Thursday.

North America

US stocks have surged as hopes for an effective COVID-19 treatment prompted a broad rally and helped investors shrug off bleak GDP data and words of warning from US Federal Reserve Chair Jerome Powell.

Big tech companies provided the biggest lift to the S&P 500 and the Nasdaq, and pushed all three major US stock averages closer to their all-time highs reached in February.

All are well within 20 per cent of their record levels, with the tech-heavy Nasdaq now within 10 per cent of its high.

Smaller US companies, which stand to benefit more from restrictions being lifted on a state-by-state basis, continue to outperform their larger counterparts, with the Russell 2000 registering its sixth straight advance.

Drugmaker Gilead Sciences Inc announced that its drug remdesivir is showing promise as an effective COVID-19 treatment, giving a boost to the broader market and sending its shares up 5.7 per cent.

The US economy suffered its sharpest decline in 11 years, with first-quarter GDP contracting at a 4.8 per cent quarterly annualised rate according to the Commerce Department, marking the end of the longest US economic expansion on record.

Many believe the worst is yet to come.

At the conclusion of its two-day monetary policy meeting, the Fed left key interest rates near zero and Powell warned the economy will drop at an "unprecedented rate" in the current quarter.

But Powell also said the economy will pick up as restrictions are lifted and vowed the central bank would continue to support the recovery.

The Dow Jones Industrial Average rose 532.31 points, or 2.21 per cent, to 24,633.86, the S&P 500 gained 76.12 points, or 2.66 per cent, to 2,939.51 and the Nasdaq Composite added 306.98 points, or 3.57 per cent, to 8,914.71.

Of the 11 major sectors in the S&P 500, all but utilities and consumer staples ended the session in the black, with energy companies enjoying the largest percentage gain.

Earnings season has hit full-stride, with 192 of the companies in the S&P 500 having reported. Of those, 64.6 per cent have beaten consensus estimates, according to Refinitiv data.

In aggregate, first-quarter S&P 500 earnings are seen dropping 15.1 per cent from a year ago, a stark reversal from the 6.3 per cent annual growth forecast on 1 January, per Refinitiv.

Google parent Alphabet Inc jumped 8.9 per cent after the company reported steady advertising sales and a 13 per cent year-on-year revenue increase.

Boeing Co shares surged 5.9 per cent after the plane maker announced it would shrink its workforce and production to contend with plunging demand.

Ride share company Lyft Inc plans to cut 17 per cent of its workforce, according to a Reuters exclusive. Its shares were up 4.0 per cent.

Facebook Inc rose about 8.0 per cent, whiles shares of both Microsoft Corp and Tesla Inc gained nearly 2.0 per cent in after-market trading following their earnings reports.

is senior 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