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Markets

Global Markets Report - 22 November

ASX set to open lower, after US tech stocks Nvidia and Microsoft fell overnight.


Australia

Australian shares are set to open lower, after US tech stocks Nvidia and Microsoft fell overnight.

ASX futures were down 0.1% or 6 point as of 8:00am on Wednesday, suggesting a lower open.

US stocks ended mostly lower as technology shares underperform. DJIA fell 62 points to 35088, the S&P 500 lost 0.2% to 4538 and the Nasdaq dropped 0.6% to 14199. Nvidia slipped 0.9% ahead of its earnings, and Microsoft shares fell 1.2% with investors focused on continued turmoil at OpenAI.

In commodity markets, Brent crude oil rose 0.2% to US$82.52 a barrel while gold was up 1.0% to US$1,998.57.

In local bond markets, the yield on Australian 2 Year government bonds was lower at 4.15% while the 10 Year yield was down at 4.44%. US Treasury notes were down, with the 2 Year yield at 4.89% and the 10 Year yield at 4.41%.

The Australian dollar hit 65.53 US cents down from the previous close of 65.54. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 98.13.

Asia

Chinese shares closed mostly lower despite hopes of more supportive measures for the country's troubled property sector. Hardware and semiconductor stocks weighed on the market. Foxconn Industrial Internet lost 1.0% and Luxshare Precision Industry declined 1.4%. Semiconductor Manufacturing International Corp. dropped 0.6%. Real estate stocks gained on a news report of Chinese regulators drafting a list of 50 companies that are eligible for obtaining funding. China Vanke gained 3.0% and Poly Developments & Holdings Group was 1.8% higher. Kweichow Moutai advanced 1.6% after it issued a special dividend. The benchmark Shanghai Composite Index ended flat at 3067.93, the Shenzhen Composite Index was 0.4% lower and the tech-heavy ChiNext Price Index was off 0.4%.

Hong Kong shares gave up early gains and closed lower, dragged by the technology sector. The strengthening of the Chinese yuan to as low as 7.13 against the U.S. dollar boosted early sentiment, market strategist Redmond Wong from Saxo said. The benchmark Hang Seng Index gained as much as 1.6% in early trade, but erased gains and closed 0.25% lower at 17733.89. The tech sector led losses, as Xiaomi and Lenovo dropped 4.9% and 3.35%, respectively. Property stocks rose after a news report that Chinese financial regulators are drafting a list of 50 developers, including private enterprises such as Longfor Group, that are deemed eligible for additional financing support, Wong said. Longfor Group led gains, rising 4.8%. Hang Lung Properties advanced 2.15% and Link Real Estate Investment Trust gained 2.3%.

Japan's Nikkei Stock Average edged 0.1% lower to close at 33354.14 amid JPY strength, which hurts the overseas earnings of Japanese exporters. However, losses were limited by gains in semiconductor names as investors remained enthusiastic about artificial intelligence after Microsoft said it was hiring ousted OpenAI CEO Altman. Automaker Mazda Motor lost 4.5%, trading firm Itochu dropped 3.65%, and auto parts maker Denso Corp. shed 3.1%. USD/JPY was at 147.67, down from 149.07 as of Monday's Tokyo stock-market close. The 10-year JGB yield was down 4.5bps at 0.695%.

Indian shares ended higher, following Wall Street's overnight gains, led by steel companies and consumer stocks. The market may have gotten a boost from the increasing probability that the U.S. Federal Reserve is done with its rate hike regime, ICICI analysts wrote in an email. JSW Steel and Tata Steel led gains, rising 1.8% and1.45%, respectively. Titan Co. rose 1.4% and Reliance Industries gained 1.2%. Tech and auto stocks led losses, Tech Mahindra was down 0.6% and Maruti Suzuki India dropped 0.5%. The benchmark Sensex rose 0.4% to 65930.77.

Europe

European stocks mostly dropped after mixed Asia trading and ahead of an expected lower U.S. open. The Stoxx Europe 600 fell 0.1%, the FTSE 100 backtracked 0.5% and the CAC 40 retreated 0.3%, though the DAX advanced 0.2%. Brent crude lost 0.3% to $82.09 a barrel, dragging oil shares lower. "Lower Treasury yields have continued to provide the foundation for more gains in equities, while earnings season has also gone better than expected," IG analysts wrote, adding that Fed minutes due later might provide some extra detail on the interest-rate outlook.

The FTSE 100 closed 0.19% lower on Tuesday at 7,481.99 points along with European equity indices slipping into the red as earnings season wraps up, IG analyst Axel Rudolph writes. London's blue-chip index best performer was Coca-Cola HBC after it announced a EUR400 million share buyback, while IAG led losses after its strategic update and had fallen almost 5% by market close.

North America

US stocks ended mostly lower as technology shares underperform.

DJIA fell 62 points to 35088, the S&P 500 lost 0.2% to 4538 and the Nasdaq dropped 0.6% to 14199.

Nvidia slipped 0.9% ahead of its earnings.

Microsoft shares slipped 1.2% with investors focused on continued turmoil at OpenAI.

A handful of retailers lost ground after reporting earnings heading into the holidays. Kohl's dropped 8.6% as its sales missed estimates, while saying it plans aggressive discounts. Best Buy fell 0.7% after cutting its full-year sales outlook, saying consumers are hunting for deals and demand has been hard to predict, and Lowe's lost 3.1% after slashing its outlook for the year.



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