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Global Market Report - 6 November

Lex Hall  |  06 Nov 2019Text size  Decrease  Increase  |  
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The Australian share market is expected to open higher despite a mixed lead from Wall Street.

The SPI200 futures contract was up 19.0 points, or 0.28 per cent, at 6,686.0 at 8am Sydney time, suggesting a rise for the benchmark S&P/ASX200 on Wednesday.

The Australian share market yesterday closed higher for the 10th session in 12 days, but losses from Westpac and goldminers kept the gains subdued.

The benchmark S&P/ASX200 index finished up 10.2 points, or 0.15 per cent, to 6,697.1 points, while the broader All Ordinaries closed 11.8 points higher to 6,811.6 points, up 0.17 per cent.

The Dow Jones Industrial Average rose 0.11 per cent, the S&P 500 lost 0.12 per cent, and the Nasdaq Composite added 0.02 per cent.

The Aussie dollar is buying 68.91 US cents from 69.05 US cents on Tuesday.


Chinese stocks extended a rally into a third session on Tuesday, as investors cheered Beijing’s latest policy easing to boost the economy after a private survey showed sluggish growth in the domestic services sector.

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The blue-chip CSI300 index ended up 0.6 per cent at 4,002.81, while the Shanghai Composite Index added 0.5 per cent at 2,991.56.

Hong Kong stocks rose for a fourth straight session on Tuesday, helped by hopes of more stimulus to arrest cooling growth on the mainland and the island city and signs of progress in Sino-US trade talks.

The Hang Seng index rose 0.5 per cent, to 27,683.40, while the China Enterprises Index gained 0.6 per cent, to 10,877.63.

Around the region, MSCI’s Asia ex-Japan stock index rose 0.48 per cent, while Japan’s Nikkei index closed up 1.76 per cent.


European shares hit more than four-year highs on Tuesday, edging closer to record highs, driven by a rally in energy and commodity-linked stocks as US-China trade-related optimism boosted risk appetite.

China is pushing US President Donald Trump to remove more tariffs as part of a “phase one” trade deal, which may be signed this month - a first step to ending a 16-month long trade war.

Mining companies rose 1.7 per cent, extending gains for a third session, while rising oil prices bolstered a rally in energy stocks. Banks continued their winning streak, ending higher for a fourth day in five.

The pan-European STOXX 600 index closed up 0.2 per cent at their highest since July 2015. AXA’s Page said the focus on Wednesday will be on euro zone services PMIs.

But a clear move out of defensive stocks and into cyclicals was evidence of risk appetite among investors. Healthcare, utilities and real estate stocks, recorded some of the biggest losses on the day.

Steep declines in some stocks after weak quarterly results, also limited gains.

More than half of European companies have already reported results, with most of them beating analysts’ estimates.

Shares of Swiss airport retailer Dufry and Associated British Foods topped STOXX 600 after reporting strong third-quarter results.

But Pandora fell 17.6 per cent, its worst day in more than a year as it warned of a steeper-than-expected fall in sales this year.

German-Spanish company Siemens Gamesa tumbled 8.7 per cent to its lowest level since January after lowering its forecast for 2020.

SAP dropped despite news that Europe’s most valuable tech company would return an extra 1.5 billion euros to shareholders next year.

North America

The benchmark S&P 500 edged lower on Tuesday, as investors paused in the wake of a rally buoyed by hopes of a trade deal between the US and China that sent the three main US stock indexes to record highs in the previous session.

While there was growing optimism over a deal, investors have also shown caution, pushing up value stocks over growth names over the past few sessions. The Russell 1000 value index has climbed nearly 2 per cent over the past three sessions compared to a gain of 0.8 per cent for the Russell 1000 growth index.

Keeping some tentativeness intact, China is pushing President Donald Trump to remove more tariffs as part of the “phase one” deal, which may be signed this month, according to latest reports.

Financials, a big weight for value stocks, rose 0.42 per cent as benchmark US Treasury yields hit a six-week high and energy, gained 0.45 per cent as oil climbed more than 1 per cent as the best performing S&P sectors. The rate-sensitive real estate sector dropped 1.76 per cent.

The Dow Jones Industrial Average rose 30.52 points, or 0.11 per cent, to 27,492.63, the S&P 500 lost 3.65 points, or 0.12 per cent, to 3,074.62 and the Nasdaq Composite added 1.48 points, or 0.02 per cent, to 8,434.68.

The S&P 500 and the Nasdaq closed at record highs for a second session on Monday, while the Dow hit a record high for the first time since July.

Apart from hopes of a resolution to the trade war, stocks have received a boost from a largely better-than-expected third-quarter earnings season, the Federal Reserve’s interest rate cut and upbeat economic data.

Data on Tuesday showed the reading on the ISM services index improved to 54.7 in October from 52.6 in September, above expectations of 53.4, according to economists polled by Reuters, easing concerns that a slowdown in the manufacturing sector was spreading to other parts of the economy.

Over three quarters of S&P 500 companies that have reported results so far have beaten profit expectations, Refinitiv data showed. Earnings for the quarter are now expected to dip 0.8 per cent, an improvement from the 2.2 per cent decline expected on 1 October.

A 2.05 per cent rise in Boeing Co’s shares provided the biggest boost to the blue-chip Dow Jones index after chairman Dave Calhoun said the company’s board believed CEO Dennis Muilenburg “has done everything right” following two fatal crashes of its 737 MAX jet.

Helping the Nasdaq advance was Adobe Inc, which gained 4.25 per cent as the Photoshop software maker raised its fourth-quarter digital media annualised recurring revenue target and gave a strong forecast for fiscal 2020.

Uber Technologies fell 9.85 per cent as the ride-hailing service posted a bigger third-quarter loss from a year earlier.

is senior editor for Morningstar Australia

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