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Markets

Global Markets Report - 30 January

ASX set to open higher, as Wall Street anticipates corporate earnings, Federal Reserve meeting.


Australia

Australian shares are set to open higher, as Wall Street anticipates earnings from large technology companies, Federal Reserve meeting.

ASX futures were up 0.5% or 38 point as of 8:30am on Tuesday, suggesting a higher open.

U.S. stocks rose to new records to start a busy week of corporate earnings, a Fed rate decision and monthly jobs data.

DJIA gained 224 points to a record 38333, the S&P 500 climbed 0.8% to a record 4927 and the Nasdaq added 1.1% to 15628.

In commodity markets, Brent crude oil fell 1.2% to US$82.57 a barrel while gold was up 0.7% to US$2,031.56.

In local bond markets, the yield on Australian 2 Year government bonds was down at 3.85% while the 10 Year yield was also down at 4.21%. US Treasury notes were down, with the 2 Year yield at 4.32% and the 10 Year yield at 4.08%.

The Australian dollar hit 66.08 US cents up from its previous close of 65.71. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 97.84.

Asia

Chinese shares closed lower, weighed down by semiconductor and tech hardware names. The benchmark Shanghai Composite Index fell 0.9% to 2883.36, snapping a four-session winning streak. The Shenzhen Composite Index shed 2.4% and the ChiNext Price Index lost 3.5%. Semiconductor shares fell broadly following Intel's tumble in New York on Friday after it gave a weak 1Q outlook. Semiconductor Manufacturing International Corp. shed 2.5% and LONGi Green slumped 7.1%. Communication infrastructure stocks dived on a news report that Donald Trump plans to impose a 60% tariff on Chinese goods if he wins the U.S. election, Citi analysts said in a note. Zhongji Innolight dropped 10% and Eoptolink Technology slid 14%. WuXi AppTec lost 10% amid concerns sparked by a draft U.S. bill on biotech firms.

Hong Kong's Hang Seng Index rose 0.8% to close at 16077.24, led by consumer and some property stocks. Investor sentiment towards the real estate sector was buoyed after China's Guangzhou said over the weekend that it would ease some limits on purchasing residential properties. China Resources Land closed 2.1% higher and Henderson Land Development added 2.1%. Among consumer stocks, Budweiser Brewing Co. APAC was up 6.6%, China Mengniu Dairy rose 4.3% and Li Ning ended 3.5% higher.

Japanese stocks ended higher, led by gains in auto and brokerage shares, as hopes for earnings growth supported the market. Mazda Motor gained 4.3% and Nomura Holdings climbed 3.1%. Inpex advanced 4.1% and Idemitsu Kosan gained 4.0% following the rise in crude oil prices amid persistent geopolitical tensions in the Middle East. The Nikkei Stock Average rose 0.8% to 36026.94. USD/JPY was at 147.98, compared with 148.16 late Friday in New York. The 10-year Japanese government bond yield rose half a basis point to 0.720%.

Indian shares ended higher amid hopes for an early interest-rate cut by the U.S. Fed as investors wait for the FOMC meeting later this week. Energy stocks rose on fuel supply concerns after the Houthis attacked a Trafigura-operated fuel tanker in the Red Sea. Reliance Industries ended 6.9% after hitting INR2,900 for the first time. Coal India rose 5.7%. Utilities stocks gained as well, with Tata Power gaining 4.6% and Adani Power 5% higher. Tech stocks weighed on the market, with Infosys down 0.9% and Tech Mahindra 0.5% lower. The benchmark Sensex ended 1.8% higher at 71941.57.

Europe

European markets closed mixed as traders await interest-rate decisions and job data later this week and crude prices fell despite simmering Middle East tensions. The Stoxx Europe 600 gained 0.2%, the FTSE 100 was broadly unchanged, the CAC 40 advanced 0.1% and the DAX dropped 0.1%. Brent crude retreated 1.3% to $81.85 a barrel, though oil shares rose. "Attacks on US soldiers in Jordan seemed to hint that a widening of the Middle East conflict was at hand, but crude prices have actually dropped sharply today as the lack of any major US response so far and growing worries about China's economy resulted in a push to the downside," IG analyst Chris Beauchamp wrote.

The FTSE 100 closed down 2.35 points, or 0.03%, after "a strong showing from heavyweight oil stocks helped make up for weakness elsewhere," AJ Bell investment director Russ Mould said in a market comment. Shares in Shell and BP rose along with oil prices on escalating tensions in the Middle East, which also propped up gold prices, helping Fresnillo to top the FTSE 100 gainers. The share-price dips of Schroders and Kingfisher dragged the blue-chip bourse after receiving rating cuts from RBC Capital Markets and Exane BNP, respectively.

North America

U.S. stocks rose to new records to start a busy week of corporate earnings, a Fed rate decision and monthly jobs data.

DJIA gained 224 points to a record 38333, the S&P 500 climbed 0.8% to a record 4927 and the Nasdaq added 1.1% to 15628.

Consumer discretionary shares led the rally, with gains from the likes of Carnival Corp., Tesla and Domino's Pizza. Energy was the worst performing sector as oil and gas prices fell.

Treasury prices increased, with the 10-year yield falling to 4.07%.

Alphabet and Microsoft are due to release earnings tomorrow, with Meta, Amazon and Apple set for Thursday.



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