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Markets

Global Markets Report - 8 February

ASX set to open higher, after US stocks lifted all major benchmarks.


Australia

Australian shares are set to open higher, after US stocks lifted all major benchmarks.

ASX futures were up 0.04% or 3 points as of 8:30am on Thursday, suggesting a slightly higher open.

U.S. stocks finished higher led by gains in the materials, real estate and health care sectors.

DJIA rose 141 points, or 0.4%, to 38521, the S&P 500 gained 0.2% to 4954 and the Nasdaq added 0.1% to 15609.

In commodity markets, Brent crude oil rose 1.0% to US$79.34 a barrel while gold was down 0.1% to US$2,034.23.

In local bond markets, the yield on Australian 2 Year government bonds was down at 3.74% while the 10 Year yield was also down at 4.08%. US Treasury notes were up, with the 2 Year yield at 4.43% and the 10 Year yield at 4.12%.

The Australian dollar hit 65.15 US cents down from its previous close of 65.20. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 98.35.

Asia

Chinese shares closed higher as investors continued to welcome Beijing's actions to shore up the ailing equities market. While these actions may lift the markets for a few weeks, direct fiscal stimulus is needed to address the root of the Chinese economy's problem, such as deflationary risk, to sustain the market's rebound, Oanda senior analyst Kelvin Wong said. Pharmaceutical and auto shares led gains. Jiangsu Hengrui Medicine gained 2.05% and WuXi AppTec rose 5.7%. BYD added 2.1% and Great Wall Motor was 1.8% higher. Kweichow Moutai added 2.1%. The benchmark Shanghai Composite Index gained 1.4% to 2829.70, Shenzhen Composite Index was 1.5% higher and ChiNext Price Index was up 2.4%.

Hong Kong's Hang Seng Index fell 0.3% to close at 16081.89, reversing earlier gains in a likely technical correction. Electronics and technology companies led losers. Semiconductor Manufacturing International Corp. slid 7.95% after its 4Q profit fell more than 50% on year. Hua Hong Semiconductor dropped 11.5% after reporting significantly lower 4Q net profit amid a global chip-industry slowdown. Meanwhile, WuXi Biologics rose 5.4%, WuXi AppTech added 4.8% and Alibaba Health Information Technology was up 4.95%. The Hang Seng Tech Index dropped 1.6% to close at 3190.68.

The Nikkei Stock Average closed 0.1% lower at 36119.92 as falls in tech and machinery stocks helped offset gains in auto and trading houses. LY Corp. fell 7.2% and Daikin Industries lost 7.1%. Meanwhile, Mitsubishi Corp. climbed 9.7% following its plan to buy back up to 10% of its outstanding shares. Toyota Motor gained 4.0%. Broader market index Topix rose 0.4% to 2549.95. Earnings are in focus. The 10-year Japanese government bond yield falls one basis point to 0.705%.

Indian shares edged lower, reversing earlier gains. Investors are waiting for the Reserve Bank of India's rate decision Thursday and Mahindra & Mahindra earnings announcement on Friday. The benchmark Sensex dropped 0.05% to 72152.00. Among the top decliners, Power Grid Corp. of India fell 2.3%, leading losses. Tech Mahindra and Infosys were down 2.3% and 2.1%, respectively. Meanwhile, the bank sector rose. State Bank of India gained 3.8% and Axis Bank advanced 1.8%. Nestle India was 1.7% higher after the company reported a slight rise in 4Q net and revenue.

Europe

European markets dropped after M&A news and corporate updates left investors unimpressed. The Stoxx Europe 600 fell 0.3%, the DAX retreated 0.7% and the CAC 40 backtracked 0.4%, with oil and mining stocks falling. Still, Brent crude rose 1.0%, to $79.34 a barrel, and the Dow rallied 0.4%. "The seesaw battle in the FTSE 100 swung the way of the bears today," IG analyst Chris Beauchamp wrote. "Barratt Developments slumped on news of its acquisition of rival Redrow and a poorly-received update from Sainsbury's hit supermarket shares. Despite the index's relative cheapness, it remains firmly unloved and languishes well off its record highs, even as its European and US peers continue to look well-placed for more gains."

The FTSE 100 closed Wednesday down 0.6% to 7628 points, dragged by the consumer-goods, retail and mining sectors, IG Chief Market Analyst Chris Beauchamp said in a note. "Despite the index's relative cheapness, it remains firmly unloved, and languishes well off its record highs even as its peers in Europe and the U.S. continue to look well-placed for more gains," he adds. Grocer Sainsbury's shares fell 6.1% to the bottom of the index after the group laid out its cost-saving strategy, followed by Barratt Developments, down 5.5% on news of its acquisition of rival Redrow. Consumer-goods heavyweight Unilever shares slipped 1.4% ahead of its 2023 earnings report tomorrow, while miners Antofagasta and Anglo American closed down 3.8% and 3.7%, respectively.

North America

U.S. stocks finished higher led by gains in the materials, real estate and health care sectors.

DJIA rose 141 points, or 0.4%, to 38521, the S&P 500 gained 0.2% to 4954 and the Nasdaq added 0.1% to 15609.

Among movers, GE HealthCare Technologies' surged 11% to lead S&P 500 gainers, after posting better-than-expected 4Q profit and revenue.

DuPont jumped 7.4% after 4Q profit tops Wall Street expectations, it lifted its dividend and announced a new buyback program.

Spotify climbed 3.9% after narrowing its quarterly loss, while revenue grew 16% helped by a price increase in the second half of 2023 and a growing ad business.



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