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
About

News

Global Market Report - 9 July

Lex Hall  |  09 Jul 2020Text size  Decrease  Increase  |  
Email to Friend

Australia

Australian shares are expected to rise early after gains on Wall Street, where a rebound in technology shares outweighed concerns from surging coronavirus cases.

The Australian SPI 200 futures contract was higher by 50.0 points, or 0.85 per cent, to 5,941.0 points at 8am Sydney time on Wednesday.

US investors have been weighing a recent string of upbeat economic data including record job additions and a rebound in the service sector in June, against the surge in US coronavirus cases recently.

The Dow Jones Industrial Average rose 0.68 per cent to 26,067.28, the S&P 500 gained 0.78 per cent to 3,169.94 and the Nasdaq Composite added 1.44 per cent to 10,492.50.

In Australia, economic data of interest to be published includes housing, personal and business loans for May.

Meanwhile Melburnians have begun the first day back of stay-at-home lockdown for six weeks in a bid to contain a second wave of coronavirus cases in the state.

Residents can only leave their homes to get food and supplies, receive or provide care, exercise, and study or work.

IG Markets analyst Kyle Rodda said whether investors have fully discounted the economic impact of the lockdown would be the driving factor for the ASX today.

He said COVID-19 sensitive sectors, such as banking, real estate and consumer discretionaries, were mostly responsible for the ASX200's 1.54 per cent drop on Wednesday.

The Australian dollar was buying 69.81 US cents at 8am, higher from 69.34 US cents at the close of trade on Wednesday.

Asia

Shares in mainland China closed at multi-year highs on Wednesday, extending their winning streak to the seventh session, as hopes of an economic recovery, regulatory and retail support sustained the market’s unabating rally.

At close, the Shanghai Composite index was 1.7 per cent higher at 3,403.44, its highest closing level since February 2018, while the blue-chip CSI300 index ended up 1.6 per cent, at its highest closing level since June 2015.

Hong Kong stocks edged higher on Wednesday, ending near a four-month high hit in the previous session, as market sentiment was lifted on hopes of recovery in the Chinese economy.

At the close of trade, the Hang Seng index was up 0.6 per cent at 26,129.18, near a four-month high hit on Tuesday.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.5 per cent, while Japan’s Nikkei index closed down 0.8 per cent.

Europe

HSBC and Nokia dragged European shares lower on Wednesday as a surge in coronavirus cases appeared to threaten a recovery in the global economy, while Britain’s plan to head off an unemployment crisis cushioned a fall in London’s domestically focused stocks.

The pan-European STOXX 600 fell 0.7 per cent with banks, travel & leisure and auto stocks dragging. Limiting losses were gains in basic material stocks and utilities.

The UK mid-caps index cut some session losses before closing 1 per cent down, after finance minister Rishi Sunak promised an additional 30 billion pounds ($54 billion) in stimulus. This included bonuses to get furloughed staff back to work and a cut in value added tax for the hospitality sector.

Economists and strategists at ING said that, while the announcements were innovative, they were unlikely to completely change the game for the UK’s economic outlook and would provide only a small respite for markets.

ING’s James Smith and Petr Krpata said uncertainty surrounding UK-EU trade negotiations would “dominate the story”, especially for sterling.

London's blue-chip index was weighed down by HSBC tumbling 3 per cent after Bloomberg reported that US President Donald Trump's top advisers had considered measures to undermine the Hong Kong currency's peg to the US dollar. The proposal could potentially limit the ability of Hong Kong banks to buy dollars.

On the STOXX 600, Nokia was the worst performer, slumping 8.1 per cent on concerns that it was losing the business of its key client Verizon in the US. JPMorgan downgraded it to “neutral”.

Pressuring hopes for global recovery, US coronavirus outbreak crossed a grim milestone of over 3 million confirmed cases, while the World Health Organisation acknowledged “evidence emerging” that the virus could spread through the air.

The STOXX 600 had climbed to a near one-month high earlier this week as improving economic data and bets of a swift rebound in China drove gains, but investors remain cautious about the progress of a European Union recovery fund and the upcoming earnings season.

Analysts expect companies listed on the STOXX 600 to report a 53.9 per cent decline in profit in the second quarter, according to Refinitiv data.

Denmark’s Orsted jumped 4.8 per cent after signing the world’s largest corporate renewable power deal with Taiwan Semiconductor Manufacturing Co.

The UK online fashion retailer Boohoo slumped for the sixth day running, hit by news that Next, Zalando and Amazon.com were delisting its products.

North America

US stocks rose on Wednesday and the Nasdaq hit a record closing high, supported by technology shares as early signs of an economic rebound offset concern about further lockdowns due to a jump in coronavirus cases across the country.

Apple Inc and Microsoft Corp provided the biggest boosts to the Dow and S&P 500, with the S&P 500 technology index up 1.6 per cent and leading sector gains. The Nasdaq outpaced the other two major indexes, ending 1.4 per cent higher, led by Amazon.com, its fourth record closing high this month.

The number of confirmed US coronavirus cases surpassed 3 million, affecting nearly one of every 100 Americans. California, Hawaii, Idaho, Missouri, Montana, Oklahoma and Texas broke their previous daily record highs for new infections.

Investors have been weighing a string of upbeat economic data including record job additions and a rebound in the service sector in June, against the surge in US coronavirus cases recently, but the S&P 500 is still up more than 40 per cent from its March closing low.

Adding to the optimistic tone late in the session, St. Louis Federal Reserve Bank President James Bullard told CNBC in an interview that US unemployment will likely decline to below 8 per cent “maybe even 7 per cent” by the end of the year.

The Dow Jones Industrial Average rose 177.1 points, or 0.68 per cent, to 26,067.28, the S&P 500 gained 24.62 points, or 0.78 per cent, to 3,169.94 and the Nasdaq Composite added 148.61 points, or 1.44 per cent, to 10,492.50.

Markets also appeared to be in a wait-and-watch mode before the beginning of the second-quarter earnings season, which kicks off next week with reports from the big Wall Street banks.

Quarterly earnings for S&P 500 companies are expected to decline nearly 44 per cent year-on-year, the steepest drop since the 2008 financial crisis, according to IBES data from Refinitiv.

Biogen jumped 4.4 per cent after the company said it submitted the marketing application for its experimental Alzheimer’s disease therapy, aducanumab.

Allstate Corp shares fell 4.8 per cent as the US insurer said it would buy National General Holdings Corp for about US$5.7 billion, scaling up its auto insurance business. National General shares surged 65.8 per cent.

is content editor for Morningstar Australia

AAP logo

© 2020 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