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Global Market Report - 14 August

Lex Hall  |  14 Aug 2018Text size  Decrease  Increase  |  
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Australia

Australian shares look set to open steady on the back of a fall on Wall Street overnight as global jitters from Turkey's plummeting currency pressure markets.

In futures trading, the SPI200 futures contract was up 5 points, or 0.08 per cent, to 6,205 points at 8.30am Sydney time. The Australian dollar is buying 72.72 US cents, from 72.81 US cents on Monday.

On Wall Street the S&P 500 and the Dow falling for the fourth session in a row. The Dow Jones Industrial Average is down 125 points, or 0.5 per cent at 25,187 points, while the S&P500 is down 11.35 points or 0.4 per cent at 2821 points.

The tech-heavy NASDAQ index is down 19.4 points or 0.25 per cent at 7819 points.

JB Hi-Fi has posted a 35 per cent jump in full-year profit and boosting its final dividend.

Steelmaker Bluescope unveiled net profit of $1.57 billion for the 12 months ended June 30, a 119 per cent increase from a year ago and its shares dropped 1.5 per cent to $17.61

Out today: NAB Business Conditions Australia - NAB Business Confidence; NAB will also release a quarterly update. Earnings reports: Challenger, Cochlear, Domino's, Whitehaven Coal.

Asia

Fears of the fallout from the Turkey currency plunge have rattled Asian stock prices and spread panic in other emerging markets.

The Shanghai Composite Index fell 1.6 per cent to 2,750.40 and Tokyo's Nikkei 225 tumbled 2.0 per cent to 21,857.43.

In Hong Kong, the Hang Seng lost 1.6 per cent to 27,907.18 and Seoul's Kospi retreated 1.5 per cent to 2248.45.

Investors responded to Turkey jitters by selling equities and buying government bonds. The dollar strengthened as traders dumped Turkish lira. Major exporters including technology, basic materials and industrial companies sank.

The Standard & Poor's 500 index slid 0.7 per cent to 2833.28, ending a five-week winning streak. The Nasdaq composite broke an eight-day rising trend and sank 0.7 per cent to 7839.11.

Money is flowing into safe-haven assets like Treasuries and the Japanese yen as the situation in Turkey raises concern over the exposure of eurozone banks.

Europe

The euro fell to a one-year low against the US dollar on Monday and sank to a one-year trough against the Swiss franc as well.

European stocks fell on Monday, with a pan-European index of shares down 0.3 per cent and the banking stock index as much as 2.6 per cent lower.

The pan-European FTSEurofirst 300 index lost 0.31 per cent.
Safe-haven government bonds were in demand, with yields on German 10-year debt, the benchmark for the euro zone, dropping to a one-month low.

Benchmark 10-year notes last fell 4/32 in price to yield 2.8714 per cent, from 2.859 per cent late on Friday.

US crude fell 2.29 per cent to $US66.08 per barrel and Brent was last at $US71.53, down 1.76 per cent on the day.

Spot gold dropped 1.5 per cent to $US1192.43 an ounce. US gold futures fell 1.59 per cent to $US1199.60 an ounce.

North America

Financial stocks bore the brunt of Turkey contagion fears, with shares of Citigroup, Bank of America, Wells Fargo & Co and JPMorgan Chase & Co closing down between 0.8 per cent and 2.2 per cent.

A pledge by Turkey's central bank to stabilise the plummeting lira failed to calm investors' nerves. The currency has dropped 40 per cent against the US dollar so far this year.

But Apple shares hit an all-time high as the first US listed company to reach $US1 trillion in market value continued a post-earnings rally. The stock finished the day up 0.6 per cent.

Amazon also reached a record level, hitting $US1,925 per share. The stock closed 0.5 per cent higher.

The Dow Jones Industrial Average fell 125.44 points, or 0.5 per cent, to 25,187.7, the S&P 500 lost 11.35 points, or 0.40 per cent, to 2821.93 and the Nasdaq Composite dropped 19.40 points, or 0.25 per cent, to 7819.71.

The second-quarter earnings season is approaching the finish line. Of the 455 companies in the S&P 500 that have reported so far, 79 per cent have beaten analysts' estimates, according to Thomson Reuters I/B/E/S.

The CBOE Volatility Index, a gauge of investor anxiety, rose for the third straight session to its highest in more than a month.

Netflix announced the departure of chief financial officer David Wells. The streaming service's shares fell 1.3 per cent.

Motorcycle maker Harley-Davidson slid by 4.3 per cent after President Donald Trump tweeted support for a boycott against the company.

Among gainers, Tesla shares edged up 0.3 per cent. Chief executive Elon Musk said he was in discussion with Saudi Arabia's sovereign wealth fund and other potential backers of his plan to take the electric car maker private, but he said financing was not yet nailed down.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is a Morningstar content editor, based in Sydney.

© 2018 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

 

is content editor for Morningstar Australia

© 2021 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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