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


Global Market Report - 31 January

Lex Hall  |  31 Jan 2020Text size  Decrease  Increase  |  
Email to Friend


Australian stocks are poised for a small bounce despite continued international concern about the deadly coronavirus.

At 8am Sydney time the SPI200 futures contract was up 36 points, or 0.52 per cent, at 6975.

Australian stocks closed lower on Thursday as gains by financial and consumer staples sectors failed to offset losses among resources and health care shares.

The benchmark S&P/ASX200 index finished down 23.1 points, or 0.33 per cent, at 7,088.4, while the broader All Ordinaries index fell 27.3 points, or 0.38 per cent, to 7108.6.

US equities also fell overnight as the coronavirus epidemic regained centre stage in markets.

The World Health Organisation has declared the coronavirus a global health emergency as the death toll reached 170 and cases leapt to over 8000.

The Australian dollar was buying US67.13 cents 7am, down from US67.38 cents as the stock market closed on Thursday.


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

Hong Kong shares fell for a second straight session on Thursday, amid weakness in healthcare and consumer stocks, as the new coronavirus spread rapidly and pushed up the total number of confirmed cases in the financial city to 10.

The Hang Seng index fell 1.7 per cent to 26,693.06 by midday, while the China Enterprises Index lost 1.8 per cent to 10,428.74 points.

Hong Kong’s de facto central bank said it will continue to monitor any possible impact from the spread the virus.

In China, the National Health Commission said the total number of deaths from the coronavirus in the country climbed to 170 as of late-Wednesday and the number of infected patients rose to 7,711.

In other markets, Asian stocks slipped while gold and bonds were in demand as worries about the spread of the virus sent investors scurrying for safety.

In Hong Kong, an index tracking consumer goods and services companies dropped 2.6 per cent.


European shares fell for the first time in three sessions on Thursday on a slate of disappointing earnings updates, with investors also fretting over the economic impact of a virus epidemic in China that has now claimed 170 lives.

The pan-European STOXX 600 fell 0.8 per cent and was on track to log its worst week in nearly four months.

London-listed shares of Royal Dutch Shell were the biggest drag on the benchmark index, shedding 4.3 per cent after the company’s quarterly profit halved. The wider energy subsector fell 2.4 per cent, also pressured by lower oil prices.

Global financial markets have seen a sharp sell-off this week as a jump in reported cases of people infected with the flu-like coronavirus raised fears of a pandemic and sparked concerns about an economic slowdown in the world’s second-biggest economy.

European miners slid 0.7 per cent on Thursday on growth concerns in the world’s top metals consumer.

Losses in flight operators such as British Airways, Germany’s Lufthansa and Air France dragged the travel and leisure sector down 0.8 per cent as airlines increasingly suspended or scaled back flights to China.

Shares of watchmaker Swatch Group slipped 4.7 per cent as it reported a marked drop in annual sales and forecast continuing challenges in its key Hong Kong market this year.

Other luxury brands - LVMH, Hermes, Gucci owner Kering, Moncler, Burberry - also slipped between 0.8 per cent to 1.8 per cent.

German-Spanish turbine manufacturer Siemens Gamesa tumbled 7.8 per cent and was on course for its worst day in six months after cutting its 2020 profitability target for a second time in three months.

On a bright note, Sweden’s H&M climbed 9.5 per cent after delivering its first increase in annual profit since 2015, while Finnish engineering group Wartsila jumped 6.4 per cent as it raised its quarterly demand outlook.

Investor attention now shifts to the Bank of England’s interest rate decision due later in the day, with expectations of the first rate cut in more than three years standing at nearly 50 per cent.

North America

US stocks rebounded late to close higher on Thursday after the World Health Organisation declared the China coronavirus a global emergency, while earnings painted a mixed picture.

After the Centres for Disease Control and Prevention reported the first US incident of person-to-person spread of the virus, the WHO said recent weeks have seen an unprecedented outbreak, met by an unprecedented response. It said it was not recommending limiting trade or travel to China.

Facebook shares slumped 6.14 per cent after the social media company warned of slowing growth as its business matured and it reported a surge in quarterly expenses.

The decline weighed on the S&P communication services index, which lost 0.79 per cent. Defensive sectors such as utilities and consumer staples, considered safer in times of economic uncertainties, advanced.

The main US stock indexes are on course for their second straight week of declines as the virus has disrupted global travel and forced several companies to suspend operations in China.

The Dow Jones Industrial Average rose 124.99 points, or 0.43 per cent, to 28,859.44, the S&P 500 gained 10.26 points, or 0.31 per cent, to 3283.66 and the Nasdaq Composite added 23.77 points, or 0.26 per cent, to 9298.93.

Earnings expectations have been slowly improving for S&P 500 companies, with Refinitiv data showing a 0.7 per cent rise in fourth-quarter profit, compared with a 0.6 per cent decline estimated at the start of the season.

Microsoft Corp gained 2.82 per cent after it beat expectations for quarterly earnings, driven by Azure cloud computing revenue growth.

Tesla jumped 10.30 per cent after the maker of electric cars posted a second straight quarterly profit as vehicle deliveries hit a record.

Altria slid 4.21 per cent after the tobacco company said it took another $4 billion charge on its investment in Juul Labs Inc. Package delivery firm United Parcel Service Inc dropped 6.70 per cent after it forecast full-year earnings below estimates.

After the close, Amazon gained 10 per cent after fourth-quarter revenue topped expectations.

is senior editor for Morningstar Australia

AAP logo

© 2022 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