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Markets

Global Markets Report - 9 February

ASX set to open higher, after another day of gains on Wall Street.


Australia

Australian shares are set to open higher, after another day of gains on Wall Street.

ASX futures were up 0.3% or 20 points as of 8:30am on Friday, suggesting a slightly higher open.

U.S. stocks posted modest gains, pushing the Dow Industrials and S&P 500 to records for the second straight session.

DJIA gained 48 points to 38726, the S&P 500 added 2 points to 4997 and the Nasdaq climbed 37 points to 15793.

In commodity markets, Brent crude oil rose 3.3% to US$81.81 a barrel while gold was down 0.1% to US$2,033.91.

In local bond markets, the yield on Australian 2 Year government bonds was up at 3.76% while the 10 Year yield was also up at 4.10%. US Treasury notes were up, with the 2 Year yield at 4.45% and the 10 Year yield at 4.15%.

The Australian dollar hit 64.89 US cents down from its previous close of 65.17. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 98.53.

Asia

Chinese shares gained in their last trading day before the over-week-long Lunar New Year holiday starting Friday. Investors are awaiting more policy support after the newly released CPI number suggested deeper deflation. "A later Chinese New Year holiday this year pushed down the number even further. The end of services reflation drove core inflation to a concerningly low level, and durable goods prices were still soft," Citi analysts said in a note. The Shanghai Composite Index closed 1.3% higher at 2865.90, the Shenzhen Composite Index rose 3.2% while the ChiNext Price Index added 1.2%. Among major stocks, semiconductor company SMIC gained 2.6% and EV Battery maker CATL added 2.0%. Bank of Ningbo fell 3.1% and China CITIC Bank Corp. declined 1.3%.

Hong Kong shares ended lower amid risk-off mood. Foreign selling of A-shares in China and H-shares in Hong Kong may continue if sentiment remains weak in the absence of greater support for China's economy, Nomura analysts say in a note. The biggest losers were Wuxi Biologics, which fell 7.6%; WuXi AppTec, which shed 7.3%; and Alibaba Group, which slipped 6.1%. Meanwhile, Semiconductor Manufacturing International Corp. rose 2.3% and China Resources Land gained 1.5%. The benchmark Hang Seng Index fell 1.3% to close at 15878.07, while theHang Seng Tech Index was 0.7% lower at 3168.55.

Japan's Nikkei Stock Average rose 2.1% to close at a 34-year high of 36863.28, tracking Wall Street's gains overnight. The "value story is far from over" as there remains scope for substantial profitability improvement which is "idiosyncratic" to Japan, Eastspring Investments' Japan team says in commentary. Pharmaceutical firm Kyowa Kirin jumped 19.4% after announcing 4Q results and a share-buyback plan. Investment company SoftBank Group climbed 11% after U.S.-listed shares of chip-designer unit Arm rose sharply following its guidance upgrade. USD/JPY was at 148.59, compared with 147.95 as of Wednesday's Tokyo stock market close. The 10-year JGB yield was down 1 bps at 0.695%.

Indian shares closed lower, dragged by bank stocks, after the country's central bank kept its policy rate unchanged amid easing inflation. The benchmark Sensex ended 1.0% lower at 71428.43, reversing opening gains. ITC Ltd. led losses, dropping 4.0%. Bank stocks fell broadly, with ICICI Bank down 3.3% and Kotak Mahindra Bank losing 3.5%. Power Grid Corp. of India led gains, rising 3.1% after its 3Q net profit grew 11% on year. Lupin closed 0.65% higher after its 3Q net profit almost quadrupled.

Europe

European shares traded mixed as investors continued to eye geopolitical Middle East tensions, boosting oil prices. Brent crude rose 2.7% to $81.32 a barrel after Israel rejected a proposed ceasefire in Gaza. "While news of an offer for ceasefire terms from Hamas was welcome, the outlook for the region still looks challenging, with Iran-backed Houthi rebels launching further attacks on shipping," Panmure Gordon analyst Ashley Kelty writes. The Stoxx Europe 600 dropped 0.1% and the FTSE 100 fell 0.4%, though the DAX advanced 0.3% and the CAC 40 gained 0.7%. Dutch payment-processing firm Adyen was the top riser, up 21% following upbeat second-half results. Still, Maersk dropped 15% after suspending share buybacks amid an uncertain outlook.

North America

U.S. stocks posted modest gains, pushing the Dow Industrials and S&P 500 to records for the second straight session.

DJIA gained 48 points to 38726, the S&P 500 added 2 points to 4997 and the Nasdaq climbed 37 points to 15793.

Energy was the best-performing sector as oil prices rose after Israel rejected Hamas' terms for accepting a U.S.-backed cease-fire proposal. Utilities and financials were the worst performers.

Disney shares jump 11% after the entertainment giant's results showed momentum in its streaming business, while it lays out bold plans for the future.

Weekly jobless claims were slightly better-than-expected, showing the labor market remains relatively robust.



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