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Global Market Report - 9 December

Glenn Freeman  |  09 Dec 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher after a positive lead from Wall Street at the end of last week.

The SPI200 futures contract was up 35.0 points, or 0.52 per cent, at 6,738 at 8am Sydney time, suggesting a bounce for the benchmark S&P/ASX200 on Monday.

On Wall Street on Friday, the Dow Jones Industrial Average finished up 1.22 per cent, the S&P 500 was up 0.91 per cent and the tech-heavy Nasdaq Composite was up 1 per cent.
Australian shares ended last week lower as the local market was weighed down by concerns about a weak domestic economy and escalating trade tensions.

The S&P/ASX 200 index fell 2 per cent to 6707 during the week. It rose 0.36 per cent, or 24 points, on Friday.

The Aussie dollar is buying 68.37 US cents from 68.45 US cents on Friday.

Ahead this week: RBA governor Philip Lowe will speak at the AusPayNet Summit in Sydney; Monetary policy meeting in Washington; Chairman Jerome Powell delivers final press conference of the year; Japan delivers third quarter GDP data and October current accounts.

Asia

China stocks ended higher on Friday, rising to their highest level in nearly two months on upbeat economic data and growing optimism for the trade outlook.

The blue-chip CSI300 index rose 0.6 per cent, to 3,902.39, while the Shanghai Composite Index added 0.4 per cent to 2,912.01.

For the week, CSI300 was up 1.9 per cent, while SSEC gained 1.4 per cent, both their largest weekly gains since the week of 11 October.

Data on China's manufacturing activity during November was surprisingly positive, showing factory activity expanded at its quickest pace in almost three years.

Official data showed factory activity returned to growth last month for the first time in seven months as domestic demand increased.

Hopes of a US-China trade deal continue to build. US President Donald Trump said on Thursday that talks are "moving right along" in progressing toward a "phase one" deal between the two powers.

Japanese shares closed higher on Friday, a day after its government approved a 26 trillion yen (US$239.32 billion) stimulus package to support growth.

The broader Topix index closed up 0.11 per cent to 1,713.36

The Nikkei index ended up 0.23 per cent to 23,354.40, buoyed by gains in industrial and financial sectors. The benchmark rose 0.26 per cent this week — its second weekly gain.

Hong Kong stocks also ended the week on a positive. The Hang Seng index rose 1.1 per cent to 26,498.37, while the China Enterprises Index gained 0.8 per cent to 10,407.18 points.

The sub-index of the Hang Seng tracking energy shares closed up 0.1 per cent, the IT sector gained 1.7 per cent, the financial sector ended 0.89 per cent higher and the property sector advanced 1.1 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.56 per cent, while Japan’s Nikkei index closed up 0.23 per cent.

Europe

European stocks inched higher on Friday on positive comments from US President Trump.
The pan-European STOXX 600 index rose 1.2 per cent, with banks, technology firms and retail companies leading the gains.

But this failed to overcome the index's worst weekly decline in two months, as conflicting news on trade and weak euro zone economic indicators took a toll.

On Friday, retail shares were among the top gainers, as Marks & Spencer rose 4.1 per cent.
London's FTSE 100 posted its best day in more than four months as sterling weakened and energy firms rode oil prices higher. But again, the week overall was poor, its worst loss in two months.

Investors are bracing for the Brexit election on 12 December, where polls are pointing toward a win by the incumbent Conservative party.

North America

Wall Street ended solidly higher on Friday as a strong jobs report and optimism reflected growing optimism over US-China trade negotiations.

All three major US stock indexes gained ground, hovering within 1 per cent of record highs set last week.

But as a tumultuous week of contradictory trade news and mixed economic data drew to a close, only the S&P 500 posted a weekly gain. The Dow and the Nasdaq ended the session down from last Friday's close.

The US economy added 266,000 jobs in November, the largest increase in 10 months, according to the Labor Department, blowing past analyst estimates. The unemployment rate edged down to 3.5 per cent.

Bank stocks had their best day in over a month, rising 1.6 per cent.

The Dow Jones Industrial Average rose 337.27 points, or 1.22 per cent, to 28,015.06, the S&P 500 gained 28.48 points, or 0.91 per cent, to 3,145.91 and the Nasdaq Composite added 85.83 points, or 1 per cent, to 8,656.53.

Of the 11 major sectors of the S&P 500, all but utilities closed in positive territory, with energy, financials and trade-sensitive industrials enjoying the largest percentage gains.

Energy stocks were buoyed by a 1.1 per cent rise in crude prices following an agreement between OPEC and its allies to extend output cuts through 2020.

Industrials had their best day in more than a month, rising 1.3 per cent.

is senior editor for Morningstar Australia

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