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Markets

Global Markets Report - 12 February

ASX set to open lower, after S&P 500 closed Friday at new high.


Australia

Australian shares are set to open lower, after the S&P 500 closed Friday at a new high.

ASX futures were down 0.1% or 7 points as of 8:30am on Monday, suggesting a slightly lower open.

The S&P 500 finished above 5000 for the first time, ending at a record level for the third consecutive session.

DJIA fell 54 points to 38671, the S&P 500 gained 0.6% to 5026 and the Nasdaq climbed 1.3% to 15990.

In commodity markets, Brent crude oil rose 0.7% to US$82.19 a barrel while gold was down 0.5% to US$2,024.26.

In local bond markets, the yield on Australian 2 Year government bonds was up at 3.79% while the 10 Year yield was also up at 4.12%. US Treasury notes were up, with the 2 Year yield at 4.48% and the 10 Year yield at 4.18%.

The Australian dollar hit 65.22 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 98.45.

Asia

China markets are closed for the lunar new year holidays.

Hong Kong's Hang Seng Index fell 0.8% to close at 15746.58 in a shortened session, dragged by shipping and health services stocks as investors likely trimmed their positions ahead of the Lunar New Year holidays. Decliners on the benchmark index included Orient Overseas (International), which dropped 8.5%, Longfor Group, which fell 6.7%, and Country Garden Services, which shed 6.7%. Meanwhile, Sands China rose 1.6%, ANTA Sports Products gained 1.6% and Haier Smart Home added 0.65%. The Hang Seng Tech Index is 1.3% down at 3127.22. The Hong Kong stock market will reopen Wednesday.

The Nikkei Stock Average edged 0.1% higher to close at a new 34-year high of 36897.42, tracking mild Wall Street gains overnight. Daifuku jumped 13% after lifting its FY net profit forecast, and SoftBank Group climbed 8.7% after reporting its first quarterly net profit in more than a year. Meanwhile, Nexon slid 12% after projecting 1Q net profit would decline on year. Nissan Motor dropped 12% after its 3Q net profit fell 42% on year. USD/JPY was at 149.40, compared with 148.58 as of Thursday's Tokyo stock-market close. The 10-year JGB yield was up 2.5 bps at 0.720%.

Indian shares closed higher, led by finance and bank stocks. Investors were likely still digesting Thursday's central bank meeting, in which the RBI stood pat and gave a fairly upbeat outlook for economic growth. State Bank of India led Friday's gains, rising 3.55%. ICICI Bank and Axis Bank added 2.1% and 1.4%, respectively. Auto group Mahindra & Mahindra Ltd. was among the decliners, dropping 2.4% ahead of earnings due later. Life Insurance Corp. of India meanwhile lost 2.3%. Paytm owner One 97 Communications slumped 6.1%. The benchmark Sensex closed 0.2% higher at 71595.49.

Europe

European shares traded mixed, though Asia stocks mostly rose. The Stoxx Europe 600 was broadly unchanged, the DAX advanced 0.1% and the CAC 40 dropped 0.2%. Brent crude edged 0.2% higher to $81.77 a barrel. Markets in Australia and Japan rose 0.1%, though Hong Kong's Hang Seng dropped 0.8%. "The Nikkei 225 crossed the 37,000 mark for the first time in 34 years as a weak yen lifted exporter stocks," IG analysts write. "Markets face a light economic calendar, with just Canadian job numbers on the agenda for the session."

The FTSE 100 index closed Friday down 0.3% to 7572 points, in line with European peers and mainly dragged by financial stocks and miners, which offset advances for oil-exposed heavyweights. "Despite all the merger an acquisition excitement and a decent showing from parts of Asia and the U.S., it wasn't a great week overall for U.K. shares. The FTSE 100 has gone nowhere for the second week in a row," AJ Bell investment director Russ Mould said in a note. Land Securities and silver producer Fresnillo were the index worst performers, both down 3.35%, followed by and Legal & General, down 3.1%. Mould noted that banks' earning season will start next week, which could bring major implications for the index given its heavy exposure to financial stocks.

North America

The S&P 500 finished above 5000 for the first time, ending at a record level for the third consecutive session.

DJIA fell 54 points to 38671, the S&P 500 gained 0.6% to 5026 and the Nasdaq climbed 1.3% to 15990. For the week the S&P 500 gained 1.4% and the Nasdaq rose 2.3%.

Information technology and consumer discretionary sectors led the gains as big cap tech shares were broadly higher.

Energy stocks were the worst performers losing 1.6%.

The Dow fell from record levels, but still managed to post a small weekly advance.

PepsiCo fell 3.6% after reporting a drop in revenue.



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