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Markets

Global Markets Report - 31 January

ASX set to open higher, after a mixed session on Wall Street amid reporting season.


Australia

Australian shares are set to open higher, after a mixed session on Wall Street amid reporting season.

ASX futures were up 0.01% or 1 point as of 8:30am on Wednesday, suggesting a higher open.

The Dow Industrials climbed to another fresh high, while the Nasdaq fell ahead of results of a number of technology heavyweights.

DJIA gained 133 points to 38467, while the S&P 500 slipped 2 points to 4924, and the Nasdaq dropped 0.8% to 15509.

In commodity markets, Brent crude oil rose 0.4% to US$82.73 a barrel while gold was up 0.1% to US$2,036.09.

In local bond markets, the yield on Australian 2 Year government bonds was down at 3.82% while the 10 Year yield was also down at 4.14%. US Treasury notes were mixed, with the 2 Year yield up at 4.35% and the 10 Year yield down at 4.04%.

The Australian dollar hit 66.05 US cents down from its previous close of 66.09. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 97.81.

Asia

Chinese shares closed lower on cautious investor sentiment. The focus is on the domestic official PMI data and the U.S. Fed decision due Wednesday. Declines were broad-based. Liquor stocks extended earlier losses with Kweichow Moutai falling 2.2% and Shanxi Xinghuacun Fen Wine Factory shedding 3.4%. Property stocks fell after the liquidation order for China Evergrande by a Hong Kong court. China Enterprise lost 9.9% and Seazen Holdings fell 5.0%. Among the few gainers, iFlytek rose 1.8% after slightly better-than-expected 2023 earnings guidance. The benchmark Shanghai Composite Index closed 1.8% lower at 2830.53, the Shenzhen Composite Index shed 2.7% and the ChiNext Price Index dropped 2.5%.

Hong Kong's Hang Seng Index fell 2.3% to close at 15703.45, weighed by property concerns. Focus has shifted to demand worries in China, where a real estate crisis has deepened after a Hong Kong court ordered the liquidation of China Evergrande Group, said Phillip Securities' research team in commentary. Hang Lung Properties fell 8.4% after parent Hang Lung Group said while reporting 2023 results that its debt-to-equity ratio rose to 32.7% at end-2023 from 29.6% at end-2022. Longfor Group shed 6.3%. Shenzhou International Group lost 7.2% and Semiconductor Manufacturing International Corp. was down 6.4%.

Japan stocks ended higher, with the the Nikkei Stock Average closing up 0.1% at 36,065.86,

Indian stocks closed lower, weighed by concerns about the outlook for earnings and cautious sentiment ahead of the release of the government's annual budget. Bajaj Finance fell 5.2% after 3Q profit missed expectations, while Bajaj Finserv, Reliance Industries and NTPC shed 2.8% each. Among the few gainers, Tata Motors rose 2.2% and Hindustan Unilever added 0.6%. The BSE Sensex ended 1.1% lower at 71139.90, reversing course from Monday's 1.8% jump and extending losses this year to 1.5%.

Europe

European markets mostly rose after preliminary 4Q GDP showed the eurozone narrowly avoiding recession. The Stoxx Europe 600 and DAX advanced 0.2%, the FTSE 100 gained 0.4% and the CAC 40 advanced 0.5%, with banks among the biggest risers. Oil shares traded mixed as Brent crude rose 0.4% to US$82.73 a barrel. Zero economic growth in the single-currency area between October and December last year followed a 0.1% contraction in 3Q, according to official data. "European stock indices ended the day on a positive note as the IMF raised its 2024 growth forecast, despite it lowering Germany's from 0.9% to 0.5% this year and Eurozone sentiment weakening slightly," IG analyst Axel Rudolph writes.

The FTSE 100 closed 0.4% higher at 7,666.31 points, a three-week high, after drinks-maker Diageo shrugged off an initial share drop following a disappointing set of results. "With the shares slipping close to this month's three-year lows it could be argued that today's initial sell-off may have brought out some bargain hunters," CMC Markets analyst Michael Hewson said in a market comment. Diageo's shares ended up 0.7% after briefly touching their highest levels in two months. Elsewhere, advertising agency WPP was among the top risers, gaining 1.9%, after lifting its medium-term guidance.

North America

The Dow Industrials climbed to another fresh high, while the Nasdaq fell ahead of results of a number of technology heavyweights.

DJIA gained 133 points to 38467, while the S&P 500 slipped 2 points to 4924, and the Nasdaq dropped 0.8% to 15509.

Microsoft and Google parent Alphabet reported after the market close, along with chip-maker Advanced Micro Devices.

UPS dropped 8.2% after announcing 12,000 job cuts along with weaker-than-expected 4Q results and guidance.

General Motors climbed 7.8% after issuing an optimistic profit outlook.

The 10-year yield edges down to 4.056%.



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