Morningstar Investor users sign in here.

Markets

Global Markets Report - 10 November

ASX set to open lower, after falls on Wall Street broke the recent winning streak for the major indices.


Australia

Australian shares are set to open lower, after falls on Wall Street broke the recent winning streak for the major indices.

ASX futures were down 0.1% or 5 points as of 8:00am on Friday, suggesting a lower open.

Earnings reports took center stage Wednesday. Stocks ticked lower as investors digested the latest reports, threatening a run of recent gains.

The S&P 500 logged its longest winning streak in two years on Tuesday after rising for a seventh straight session. The S&P 500, Dow industrials and Nasdaq Composite made small moves, with the Dow down less than 100 points.

Meanwhile, the 10-year U.S. Treasury yield, which falls when bond prices rise, has fallen from above 5% just a few weeks ago to below 4.6%.

With a light calendar of economic data this week, some traders are focusing on the bond market. A $40 billion auction of 10-year Treasurys, slated for early afternoon, is expected to test demand for U.S. debt.

In commodity markets, Brent crude oil rose 0.4% to US$79.86 a barrel while gold also rose 0.4% to US$1,958.41.

In local bond markets, the yield on Australian 2 Year government bonds was unchanged at 4.22% while the 10 Year yield was down at 4.53%. US Treasury notes were up, with the 2 Year yield at 5.03% and the 10 Year yield at 4.63%.

The Australian dollar hit 63.67 US cents down from the previous close of 64.00. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.29.

Asia

Chinese shares closed mostly lower as sentiment was weighed by China's October inflation data. The weak CPI data reflects uncertainty around the solidity of China's recovery, which will likely prompt policymakers to keep supportive measures coming through, HSBC economist Erin Xin said in a note. HSBC expects another 50bp RRR cut from the PBOC by year-end to provide liquidity support. Insurance and pharmaceutical stocks led losses. Ping An Insurance dropped 3.0% and China Pacific Insurance shed 0.5%. Jiangsu Hengrui Medicine declined 1.8% and Wuxi AppTec was down 2.0%. Energy stocks rose broadly, with PetroChina up 0.85% and Sinopec rising 1.7%. The benchmark Shanghai Composite Index ended flat at 3053.28, the Shenzhen Composite Index was 0.5% lower and the tech-heavy ChiNext Price Index declined 0.3%.

Hong Kong shares closed mixed, as property and consumer stocks fell while tech gained. Focus was on the latest Chinese economic data, which cast some doubt on economic recovery hopes, IG market strategist Jun Rong Yeap says. The benchmark Hang Seng Index fell 0.3% to 17511.29, in line with mainland shares that ended mostly lower. China's inflation data signal still-weak consumer demand and Chinese equities continue to lack traction, Yeap adds. Country Garden led the losses in Hong Kong, falling 7.6% after Ping An said it no longer held shares in the real-estate company. Fellow developer Longfor Group shed 5.4%. In the consumer sector, retailer Li Ning and China Mengniu Dairy lost 4.0% and 3.3%, respectively. Tech led the gains, with Xiaomi up 2.35% and NetEase adding 1.7%.

Japanese stocks ended higher, led by gains in tech and auto stocks, as concerns have eased about borrowing costs. NTT Data Group gained 4.5% and Nissan Motor climbed 3.9%. The Nikkei Stock Average closed 1.5% higher at 32646.46. The 10-year Japanese government bond yield fell 1.5 basis points to 0.830%, while the 30-year yield dropped 5.5 basis points to 1.710%. Investors remain focused on earnings and the war in the Middle East.

Indian shares closed lower, dragged by tech and consumer stocks. The Indian equities market is facing similar concerns as its global peers amid geopolitical tension in the Middle East and elevated rates in the U.S., ICICI analysts write in an email. Still, they say India's market may be an outlier, having medium- and long-term growth potential with robust corporate earnings and favorable growth-inflation dynamics in the country. Consumer-goods company Hindustan Unilever led losses with a 1.6% decline. Tech Mahindra and Infosys shed 1.3% and 1.2%, respectively. The energy sector rose as Power Grid Corp. of India added 1.5% and JSW Energy gained 0.2%. The benchmark Sensex ended 0.2% lower at 64832.20.

Europe

European stocks rose as oil shares gained on the back of rising crude prices. The Stoxx Europe 600 and DAX advanced 0.8%, and the CAC 40 climbed 1.1%, with property shares among the biggest pan-European risers. BP, TotalEnergies, Shell, Eni and others advanced as Brent crude rallied 1.6% to $80.79 a barrel. Still, oil prices have remained below where they were in late September amid expectations of a well-supplied market in coming months, S&P Global Commodity Insights said. "The onset of the Israel-Hamas war does fuel volatility and bring additional risks, but it hasn't affected underlying oil-market fundamentals," S&P Global's Jim Burkhard wrote.

The FTSE 100 ended up 0.7% at 7,455.67 points, after three days of consecutive falls and a flurry of mixed results and trading updates. "Plenty of companies are finding they cannot meet market expectations and so we're seeing some chunky one-day share price declines," AJ Bell investment director Russ Mould says. The day's biggest faller was betting operator Flutter Entertainment, tumbling 10% after forecasting low-end full-year profits, while its counterpart, online car marketplace Auto Trader, rose 8.5% after better-than-expected results. Also boosting the blue-chip bourse was pharma giant AstraZeneca, up 2.6% after lifting its guidance and signing a weight-loss drug deal.

North America

U.S. stocks fell on Thursday, putting the longest win streak for the S&P 500 index in two years on the line, after a Treasury auction went poorly and Federal Reserve Chairman Jerome Powell said interest rates might not yet be high enough.

The Dow Jones Industrial Average was down 188 points, or 0.5%, near 33,926 in the final hour of trade. The S&P 500 index was 0.7% lower and the Nasdaq Composite Index was down 0.9%, according to FactSet.

Fed Chair Powell said uncertainty remains around if the central bank's policy rate at a 22-year high is enough to bring falling inflation down to its 2% target, in a sustainable way, in a speech at the International Monetary Fund. The 10-year Treasury yield was up 11 basis points to 4.63%, but still below its recent 5% high. Higher longer-duration bond yields can hurt economic activity by making borrowing too costly, which may work toward the Fed's inflation goal. But the fear is that higher rates also could go too far and spark a recession.

Seed and pesticides maker Corteva slides 8% following Wednesday's announcement it was closing one of its chemical facilities and halting operations in others to cut costs.

Becton Dickinson falls 9% after the medical-device maker reported 2024 sales and earnings outlook that were below analysts' expectations.



© 2023 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This report has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or New Zealand wholesale clients of Morningstar Research Ltd, subsidiaries of Morningstar, Inc. Any general advice has been provided without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.

More from Morningstar

Resist doomism: How investors can address climate risks here and now
Markets

Resist doomism: How investors can address climate risks here and now

Three ways to consider climate’s role in your investments, Morningstar CEO says.
Global Markets Report - 7 December
Markets

Global Markets Report - 7 December

ASX set to open lower after broad selloff on Wall Street, US treasuries continue to decline.
Global Markets Report - 6 December
Markets

Global Markets Report - 6 December

ASX set to open higher, while US stocks continued to pull back from their late-November rally.
Global Markets Report - 5 December
Markets

Global Markets Report - 5 December

ASX set to open lower, after all three major US indices lost ground.
Outlook 2024: How to take advantage of AI without valuation risk
Markets

Outlook 2024: How to take advantage of AI without valuation risk

Be smart about your exposure to AI and avoid overpriced assets
Global Markets Report - 4 December
Markets

Global Markets Report - 4 December

ASX set to open higher, after the Dow, S&P 500 finished at highest levels since early 2022, US treasuries continued lower.