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Global Market Report - 5 December

Glenn Freeman  |  05 Dec 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher after stocks on Wall Street rebounded overnight.

The SPI200 futures contract was up 56 points, or 0.85 per cent, at 6,667.0 at 8am Sydney time, suggesting an early rise for the benchmark S&P/ASX200 on Thursday.

The S&P/ASX 200 index yesterday hit its lowest level in a month, falling 1.6 per cent to 6,606.5 at the close of trade. This followed a 2.2 per cent dip for the benchmark on Tuesday.

On Wall Street, the Dow Jones Industrial Average was up 0.66 per cent, the S&P 500 was up 0.65 per cent and the tech-heavy Nasdaq Composite was up 0.63 per cent.

US President Donald Trump yesterday said trade talks with China are going "very well", sounding more positive than a day earlier when he said a trade deal might have to wait until after the 2020 US presidential election.

"Discussions are going very well and we'll see what happens," Trump told reporters on Wednesday at a meeting of NATO leaders near London.

The Aussie dollar is buying 68.53 US cents, up from 68.46 US cents on Wednesday.

Ahead today: The Australian Bureau of Statistics will release its data on retail and the country's trade balance for October at 11:30am.

Asia

China stocks ended lower on Wednesday, as hopes of a quick initial trade deal were dented following US President Trump’s remarks. But a series of recent upbeat data and surveys suggesting an up-tick in the Chinese economy offset some of the losses.

The blue-chip CSI300 index was unchanged at 3,849.82, while the Shanghai Composite Index closed down 0.2 per cent at 2,878.12.

The Hong Kong market closed at its lowest level in almost two months, again on the back of Trump's remarks and renewed US-China trade tensions following from the US President's remarks.

The Hang Seng index fell 1.3 per cent to 26,062.56 while the China Enterprises Index shed 1 per cent to 10,254.09 – both at their lowest closing levels since early October.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.86 per cent, while Japan’s Nikkei index closed just over 1 per cent lower.

Europe

European stocks have opened higher, recovering some of the losses that occurred in the previous session following US President Trump's comments suggesting there was no end in sight to the trade disagreement with China.

The pan-European equity index STOXX 600 closed 1.2 per cent higher, having slumped 2.2 per cent since the beginning of the month.

Financials and industrials led the charge, with planemaker Airbus gaining 3.2 per cent after winning an order from US carrier United Airlines.

The mood on European trading floor is subject to change, with investors awaiting a salvo of surveys on the health of the service sector of major European countries.

The latest trade war scare has put the brakes on a rally that had lifted the S&P 500 since early October, when top diplomats from China and the United States met and outlined an initial agreement that Trump said he hoped could be sealed within weeks.

Trade-sensitive German shares were up 1.2 per cent, logging their biggest percentage gain in a month.

French shares gained 1.3 per cent after Trump and his French counterpart Emmanuel Macron said on Tuesday that they hoped to smooth out their differences over a digital services tax.
In currency markets, the euro was flat against the dollar at 1.1081. The Japanese yen and Swiss franc, seen as safe havens during market storms were making gains, up 0.17 per cent and 0.13 per cent respectively.

North America

US President Trump's more upbeat comments about progress on trade talks with China saw all three major US indexes end a three-day losing streak.

The Dow Jones Industrial Average rose 146.97 points, or 0.53 per cent, to 27,649.78,

The S&P 500 was up 19.57 points, or 0.63 per cent, to 3,112.77.

The Nasdaq Composite added 46.03 points, or 0.54 cent to close at 8,566.67.

Trump's comments came after news reports suggesting the two largest economies were nearing agreement on how many tariffs would be rolled back in a phase one trade deal.

All 11 major sectors of the S&P 500 closed higher overnight, with energy enjoying the biggest percentage gain, boosted by a 4 per cent jump in crude prices.

Shares in Google parent Alphabet were up 1.9 per cent after it announced Sundar Pichai would take over as CEO.

Other big gainers were medical device and pharmaceutical company Johnson & Johnson and online travel platform Expedia Group, who rose 1.6 per cent and 6.2 per cent.

Investors are now awaiting the US Labor Departments' November employment report, due on Friday.

is senior editor for Morningstar Australia

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