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Global Market Report - 30 September

Lex Hall  |  30 Sep 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open lower after a negative lead from overseas, including reports the US is considering delisting Chinese companies.

The SPI200 futures contract was down 12 points, or 0.18 per cent, at 6,683.0 at 7am Sydney time, suggesting a dip for the benchmark S&P/ASX200 on Monday.

The Australian share market has closed higher, with gains across the board, but the ASX still ended up suffering its first losing week since mid-August.

The benchmark S&P/ASX200 index finished Friday up 38.5 points, or 0.58 per cent, to 6,716.1 points, while the broader All Ordinaries was also up 38.5 points, or 0.57 per cent, to 6,824.1 points.

On Wall Street on Friday, the Dow Jones Industrial Average finished down 0.26 per cent, the S&P 500 was down 0.53 and the tech-heavy Nasdaq Composite was down 1.13 per cent.

The RBA is widely tipped to lower the cash rate by 25 basis points to 0.75 per cent when it meets tomorrow.

The Aussie dollar is buying 67.62 US cents from 67.61 US cents on Friday.


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China stocks edged up on Friday, but posted their sharpest weekly loss since early August due to trade uncertainties and slowing growth, ahead of a week-long holiday.

The blue-chip CSI300 index rose 0.3 per cent to 3,852.65, while the Shanghai Composite Index inched up 0.1 per cent to 2,932.17.

Hong Kong stocks dipped on Friday, weighed down by the persisting political crisis in the city and caution over US-China trade relations.

The Hang Seng index closed down 0.3 per cent at 25,954.81 points, while the China Enterprises Index fell 0.6 per cent to 10,148.77 points. The benchmark posted a weekly decline of 1.8 per cent, after dropping 3.4 per cent last week.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.24 per cent, while Japan’s Nikkei index closed down 0.77 per cent.


European shares rose on Friday, with London listed mining stocks driving gains due to a weaker pound, while hopes of a quick resolution to the US-China trade war offset worries about slowing economic growth.

The FTSE 100, packed with companies whose revenues tend to rise when Britain's pound falls, jumped 0.8 per cent to a near two-month high, after the currency took a hit from the Bank of England's first clear signal it was eyeing an interest rate cut.

The pan-European STOXX 600 index rose 0.3 per cent with the basic resources sector gaining 1.6 per cent, the most among the major European sub-sectors. It is still on course for a small fall this week that would be its first since mid-August.

Shares of Norwegian aluminium company Norsk Hydro gained 1.4 per cent after a Brazilian court lifted its final production embargo on the company’s key plant.

News overnight, ranging from a profit warning from chipmaker Micron, to reports of fresh scrutiny of US suppliers to Huawei and the release of a whistleblower report on President Donald Trump had weighed on sentiment in Asia and Wall Street.

The top percentage gainer on the STOXX 600 was asset manager Ashmore Group which gained 2.5 per cent after Morgan Stanley upgraded its stock to “overweight”.

However, shares of semiconductor companies Infineon, AMS and ASM International came under pressure after Micron forecast first-quarter profit below Wall Street targets.

The US and China are prepping for another round of high-level trade talks scheduled for 10 and October in Washington, aimed at resolving their near 15-month long trade dispute.

Multiple profit warnings from European companies this week have fuelled fears of recession and any gains have tended to come in sectors commonly perceived as defensives - healthcare, real-estate and utilities.

North America

US stocks have fallen after reports the Trump administration is considering delisting Chinese companies from US stock exchanges, raising worries about a further escalation in the US-China trade war.

The move would be part of a broader effort to limit US investment in Chinese companies, sources told Reuters.

High-level trade talks between Washington and Beijing are scheduled for October 10-11, before the start of the US third-quarter earnings season.

The tariff-sensitive Philadelphia semiconductor index extended its decline after the reports and ended down 2.4 per cent on Friday.

The index was already under pressure from Micron Technology's, which tumbled after it forecast a disappointing first-quarter profit.

The S&P technology index dropped 1.3 per cent. US-listed shares of Alibaba, Baidu and JD all slid.

Adding to the negative momentum in afternoon trade, the S&P 500 index briefly fell below its 50-day moving average.

The Dow Jones Industrial Average fell 70.87 points, or 0.26 per cent, to 26,820.25, the S&P 500 lost 15.83 points, or 0.53 per cent, to 2961.79 and the Nasdaq Composite dropped 91.03 points, or 1.13 per cent, to 7939.63.

All three indexes ended lower for the week as well, with the S&P 500 and Nasdaq registering their biggest weekly percentage drops since August.

The Cboe volatility index ended at a three-week high.

Shares of Wells Fargo rose 3.8 per cent and the stock was the top gainer in the S&P 500 after the lender named banking veteran Charles Scharf as chief executive.

Data early in the day showed US consumer spending barely rose in August, suggesting the economy's main growth engine was slowing after accelerating sharply in the second quarter.

Declining issues outnumbered advancing ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favoured decliners.

The S&P 500 posted 11 new 52-week highs and six new lows; the Nasdaq Composite recorded 29 new highs and 118 new lows.

Volume on US exchanges was 6.68 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.

is senior editor for Morningstar Australia

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