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Global Market Report - 14 September

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

Australian shares look set to open higher after a strong performance by Wall Street, thanks to a bounce in Apple shares that boosted the major US stock indexes.

In futures trading, the SPI200 futures contract was up 27 points, or 0.44 per cent, to 6158 points by 8.30am Sydney time. The Australian dollar was buying 71.93 US cents, from 71.87 US cents on Thursday.

On Wall Street, the Dow Jones Industrial Average inched closer to the all-time high it hit on January 26, closing at its highest since February 1, up 147.07 points, or 0.57 per cent, at 26,145.99

The broader S&P 500 index was up 15.26 points, or 0.53 per cent, at 2904.18, and the tech-heavy NASDAQ index is up 9.48 points, or 0.75 per cent, to 8013.71.

Local energy stocks could suffer after oil prices had their largest fall in a month on concerns that emerging market crises and trade disputes could dent demand even as supply tightens.

But the big miners could do well as iron ore firmed overnight and copper rose to its highest in two weeks after China welcomed an invitation by the US to hold a new round of trade talks.

Out today: Nine Entertainment chief executive Hugh Marks is due to speak at an event in Sydney - and may discuss his company's ongoing merger with Fairfax Media.

Asia

Markets in Asia started off a rally after the US reached out to China for fresh talks in a bid to avert a trade war, providing some much-needed respite to weary investors.

Hong Kong's Hang Seng index jumped 2.5 per cent, having fallen for six straight days and into a bear market, which is a 20 per cent drop from its January record high.

The benchmark Shanghai Composite index ended 1.1 per cent higher at 2686.58 points after closing at its lowest level since January 2016 on Wednesday.

The blue-chip CSI300 index also ended 1.1 per cent higher, with a sub-index tracking securities firms gaining 1.4 per cent, real estate rising 0.8 per cent and industrials ending up 1 per cent.

Europe

In Europe, London ended the day down 0.4 per cent, penalised by a stronger pound which hurts companies which do most of their business globally and convert profits back into sterling.

The European Central Bank indicated it planned to continue reducing its asset purchases, which helped the euro rise against the dollar.

Frankfurt’s DAX 30 managed to remain in the green, but the CAC 40 in Paris slid into the red just before the closing bell.

North America

Apple has led a rebound in technology shares and boosted all three major US stock indexes, while trade worries eased after China welcomed new talks with the US.

The Dow inched closer to its all-time high that was hit on January 26, closing at its highest since February 1 on Thursday and just 1.8 per cent below the January 26 close.

The S&P 500 and the Nasdaq had already moved past their January peaks to record highs in prior weeks.

The S&P technology index climbed 1.2 per cent on Thursday, its biggest percentage gain since August 2, boosted by Apple's 2.4 per cent gain.

The timing of a new round of trade talks remains unclear and US President Donald Trump said the US was under no pressure to make a deal with China.

Portfolio manager at Allianz Global Investors in Dallas, Burns McKinney, said stocks already had a boost on Wednesday when investors got word the Trump administration had reached out to China on trade talks.

US consumer prices rose less than expected in August and underlying inflation pressures also appeared to be slowing, a report from the US Labor Department showed.

On Wednesday, the Trump administration invited Beijing for a new round of talks, even as Washington prepared to slap tariffs on $US200 billion worth of Chinese goods.

The trade-sensitive industrial index rose 0.5 per cent. Caterpillar was up 0.9 per cent and Boeing rose 0.6 per cent.

Apple, which has said tariffs could hit a "wide range" of its products, fell on Wednesday when it unveiled its largest-ever iPhone, but made only small, widely expected changes to its line-up.

Shares of Home Depot slipped 1.2 per cent, Lowe's Cos fell 1.4 per cent and Beacon Roofing Supply dropped 5.9 per cent as Hurricane Florence, which began lashing coastal North
Carolina, was downgraded to a category 2.

The S&P consumer staples index fell 0.4 per cent as shares of Kroger weighed on the sector.
Kroger slid 9.9 per cent after the supermarket chain's same-store sales missed estimates as customers were put off by changes in how it stocked merchandise.

Chipmakers bounced back from a slide on Wednesday, with the Philadelphia semiconductor index up 1.2 per cent.

Qualcomm rose 4.0 per cent after it said it would buy back about $US16 billion of its stock.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is content editor, Morningstar Australia

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