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Global Market Report - 30 December

Lex Hall  |  30 Dec 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to start the week lower following a stutter in Wall Street's year-end surge.

The SPI200 futures contract was down 22 points, or 0.33 per cent, at 6722.0 by 7am Sydney time on Monday, suggesting an early slide for the benchmark S&P/ASX200.

The ASX had its best session in seven on Friday, yet US stocks closed flat - with the S&P 500 up fractionally 0.1 point.

The market closes on Wednesday for New Year's Day before CoreLogic home price data for December is released in Australia on Thursday with a growth in the market expected.

Various international manufacturing data is also expected to be released this week.

Meanwhile, copper prices hit their highest since May after profits at industrial companies in top metals consumer China grew at their fastest pace in eight months

Metals prices were also boosted as Beijing and Washington move closer to an initial trade deal.

Oil prices are also higher, steadying at three-month highs after new data showed US crude inventories have fallen far more than expected.

The Aussie dollar is buying 69.76 US cents from 69.54 US cents on Friday.

Asia

China stocks gave up early gains to close lower on Friday as losses in tech firms offset optimism due to the rebound in November industrial profits, though major indexes posted a fourth straight weekly gain.

The blue-chip CSI300 index closed 0.1 per cent lower at 4,022.03, while the Shanghai Composite Index shed 0.1 per cent to 3,005.04. Both indexes rose as much as 1 per cent during the session.

Hong Kong stocks closed at a five-month peak on Friday as investors cheered a rebound in China’s industrial profits for November, while hopes that Beijing and Washington will soon sign a trade deal aided sentiment.

The benchmark Hang Seng index ended up 1.3 per cent at 28,225.42, the highest closing level since 26 July, while the China Enterprises Index gained 1.4 per cent to 11,194.55.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.69 per cent, while Japan’s Nikkei index fell 0.36 per cent.

Europe

European stocks wrapped up a holiday-thinned week at record highs on Friday as growing hopes that a Sino-US trade deal would be inked soon, as well as the latest dose of upbeat China data supported prospects of an improving global growth.

The pan-European STOXX 600 index gained about 0.2 per cent as investors returned from Christmas and Boxing day holiday to comments from Beijing that it was in close contact with Washington about their initial agreement, shortly after US President Donald Trump talked up a formal signing ceremony.

The benchmark index, up more than 24 per cent so far in 2019, is on course for its best year since the global financial crisis as firming indications of a Phase 1 trade deal and hopes of a smoother Brexit in the final month of the year.

Adding to the upbeat mood was economic data on Friday which showed profits at industrial firms in China rose at the fastest pace in eight months in November.

Among European sectors, financial services index, industrial goods & services, chemicals and health care index notched intraday record highs.

Trade-sensitive European miners gained 0.7 per cent on Friday.

The export-heavy German stock index climbed 0.3 per cent while UK's blue-chip notched its eleventh straight session of gains.

Even with the recent UK general election smoothing the path for Britain’s exit from the European Union, the country’s ability to strike a new trading deal with the EU in a relatively short span of time remains a concern for some investors.

With no major updates expected this year either on the trade front or on future Brexit negotiations, volumes are expected to remain light until the first full week of January.

Investors will also look to fourth-quarter corporate financial results due next month for clues on companies’ outlook on growth next year.

In a light day for corporate news, Qiagen shares tumbled about 18 per cent, hitting the bottom of STOXX 600 after the genetic testing firm decided against selling the company.

North America

The Nasdaq has snapped an 11-day streak of gains on Friday after some late-session weakness, but the S&P 500 and the Dow scratched out record closing highs with slight gains as a year-end rally chugged along.

With only two trading days left for the year, the benchmark S&P 500 has climbed more than 29 per cent so far in 2019, its biggest annual percentage gain since 2013.

Trading volume has been thin during the holiday-shortened week and could continue to be sparse through the New Year's holiday on Wednesday.

Data on Friday showed profits at China's industrial firms grew at the fastest pace in eight months in November, but broad weakness in the country's domestic demand remains a risk for company earnings next year.

Investor expectations that the US and China will soon sign a phase-one trade deal has added momentum to the stock market heading into 2020.

The Dow Jones Industrial Average rose 23.87 points, or 0.08 per cent, to 28,645.26, the S&P 500 gained 0.11 points to 3240.02 and the Nasdaq Composite dropped 15.77 points, or 0.17 per cent, to 9006.62.

Among S&P 500 sectors, consumer staples, real estate and utilities were the top performers. Energy and materials lagged among the sectors.

Aside from optimism over trade relations, the stock market has been lifted by interest rate cuts by the Federal Reserve and better-than-feared economic data and corporate profits.

About 5.2 billion shares changed hands in US exchanges, compared with the 6.8 billion daily average over the last 20 sessions.

 

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