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Global Market Report - 30 November

Lex Hall  |  30 Nov 2020Text size  Decrease  Increase  |  
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Australia

Australian shares are set to rise following strong gains on Wall St, including a Nasdaq record, as retail sales begin.

The Australian SPI 200 futures contract was up 39 points, or 0.6 per cent, to 6,642 points at 8.30am Sydney time on Monday, suggesting a positive start to trading.

Wall Street stocks advanced, with the Nasdaq closing at a record high, on Friday in a holiday-shortened week as retailers kicked off the year-end shopping season amid record covid-19 hospitalisations.

The Dow Jones Industrial Average rose 37.9 points, or 0.13 per cent, to 29,910.37; the S&P 500 gained 8.7 points, or 0.24 per cent, at 3,638.35; and the Nasdaq Composite added 111.44 points, or 0.92 per cent, at 12,205.85.

Locally, the Morrison government has appealed to the World Trade Organisation to address Beijing's stonewalling of efforts to resolve issues and urged an end to discrimination against Australian exporters, the AFR reports.

The S&P/ASX200 benchmark index closed lower by 35.3 points, or 0.53 per cent, to 6,601.1 on Friday. The index finished 0.95 per cent ahead for the week. The All Ordinaries closed Friday with a drop of 32 points, or 0.47 per cent, to 6,816.8.

Gold was down 1.5 per cent at $US1,787 an ounce; Brent oil was up 0.8 per cent to $US48.18 a barrel; Iron ore was up 1 per cent to $US129.62 a tonne.

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Meanwhile, the Australian dollar was buying 73.91 US cents at 8.30am, up from 73.75 US cents at Friday's close.

Asia

China's blue-chip stocks rose on Friday, helped by upbeat industrial profits that pointed to a continued recovery in the world's second largest economy amid the coronavirus outbreak.

The CSI300 index rose 0.1 per cent to 4,924.15 points at the end of the morning session, while the Shanghai Composite Index fell 0.1 per cent to 3,368.12 points.

In Hong Kong, the Hang Seng index dropped 0.2 per cent to 26,776.83 points, while the Hong Kong China Enterprises Index gained 0.1 per cent to 10,716.05.

Japan’s Nikkei stock average ended at its highest since April 1991 on Friday as it rallied for the fourth session in a row, buoyed by hopes of economic recovery and strong corporate earnings, after progress in covid-19 vaccine development.

The Nikkei rose 0.41 per cent to close at 26,644.71. The index has gained 15.96 per cent this month, and is on track for its best performance since January 1994. The broader Topix rose 0.47 per cent to hit a 25-month high at 1,786.52.

Europe

European shares gained for a fourth straight week on Friday as investors looked past near-term virus damage and hoped for a quicker economic revival next year, while Spanish lender BBVA gained after ending merger talks with Banco Sabadell.

The pan-European STOXX 600 ended 0.4 per cent higher and added 0.93 per cent for the week, with tech and banks leading gains, while energy stocks were the top gainers for the week on rising oil prices.

BBVA gained 4.2 per cent and was among the top gainers on the benchmark index. Banco Sabadell shares fell 13 per cent, as the merger failure is expected to add pressure on the lender, which was seen as the weaker link in the potential transaction.

The two banks had looked for a deal to create Spain’s second-biggest domestic bank.

“Investors have looked past the near-term risks and placed their bets on faster economic growth next year with the market turning more bullish even at the slightest of ease in restrictions coupled with expectations of more stimulus in case things go wrong,” ETX Capital analyst Michael Baker said.

The STOXX 600 index has gained 40 per cent since a coronavirus-driven slump in March and was set to end its best month on record, but rising infections in some European countries have capped gains.

The number of infections in Germany surpassed the one million mark and the daily death toll hit a record high on Friday, while lawmakers announced plans to almost double the borrowing for next year to fight the pandemic.

A survey by the European Commission showed euro zone economic sentiment fell in November for the first time in seven months as a second covid-19 wave struck the continent.

British mid-caps were the worst performers for the week and the only index among its European peers that recorded losses as the end-of-year deadline for a Brexit trade deal looms, while France’s CAC 40 and Italy’s FTSE MIB were the top gainers.

The European Union and Britain said there were still substantial differences over a trade deal with just five weeks left until the United Kingdom finally exits the EU’s orbit.

France’s benchmark CAC 40 index gained 0.8 per cent as the country reported another drop in infections and hospitalisations.

British drugmaker AstraZeneca reversed losses to rise 0.3 per cent as Britain and other countries pressed for a possible rollout even as experts raised questions about the results of its late-stage vaccine study.

North America

Wall Street stocks advanced, with the Nasdaq closing at a record high, on Friday in a holiday-shortened week as retailers kicked off the year-end shopping season amid record covid-19 hospitalisations.

The Nasdaq outperformed as investors favoured tech-related, market-leading stocks that have fared well during the pandemic, while economically sensitive cyclical stocks weighed.

All three indexes rose for the week, in which the S&P 500 reached a new closing high and the blue-chip Dow ended above 30,000 for the first time ever.

“It’s an abbreviated session and volume is light, so the only conclusion is that the rally is not faltering for now,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“It does bode well for next month,” Cardillo added. “Will we see a Santa rally? Most likely. Will it be as robust as November? That’s a big question mark.”

Retailers opened their doors to Black Friday shoppers, with social distancing practices and other measures put in place to mitigate infection risks, while offering steep discounts.

“Black Friday has been somewhat tarnished—traffic is down due to the pandemic—but the good news is e-commerce sales have reached a new record,” Cardillo said. “That’s encouraging.”

In the latest development on the road toward developing a vaccine against covid-19, Britain gave drugmaker AstraZeneca the green light after experts raised questions about the vaccine’s trial data.

As US hospitalisations for coronavirus set a grim record of more than 89,000, the race for a medical solution to the pandemic has led to promising vaccines from Pfizer Inc, Moderna Inc and others, fuelling optimism for light at the end of the tunnel.

The Dow Jones Industrial Average rose 37.9 points, or 0.13 per cent, to 29,910.37; the S&P 500 gained 8.7 points, or 0.24 per cent, at 3,638.35; and the Nasdaq Composite added 111.44 points, or 0.92 per cent, at 12,205.85.

Of the 11 major sectors in the S&P 500, healthcare companies enjoyed the largest percentage gains while energy shares had the biggest percentage loss.

Chipmaker stocks, which have been resilient throughout the global health crisis, once again outperformed the broader market, with the Philadelphia SE Semiconductor index rising 1.2 per cent.

Shares of Walt Disney Co dipped 1.3 per cent after the company said it would lay off about 32,000 workers, up from the 28,000 announced previously. Jobs will be cut mainly at Disney’s theme parks.

Tesla Inc built on its recent rally, its shares advancing 2.0 per cent even as  US regulators opened an investigation into front suspension issues in about 115,000 Tesla vehicles.

US-listed shares of iQIYI Inc fell 1.7 per cent after Reuters reported Alibaba Group Holding Ltd and Tencent Holdings Ltd had put on hold talks to buy a controlling stake in the video streaming service.

is content editor for Morningstar Australia

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