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Global Market Report - 15 August

Lex Hall  |  15 Aug 2018Text size  Decrease  Increase  |  
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Australia

Australian shares are likely to open slightly lower, despite gains on Wall Street overnight, as a decline in commodities prices weighs on the local market.

In futures trading, the SPI200 futures contract was down 10 points, or 0.16 per cent, to 6236 points at 8.30am Sydney time. The Australian dollar is buying 72.66 US cents, unchanged from Tuesday.

Overnight, Wall Street's three major indexes rose as a string of healthy earnings boosted investor optimism and a rebound in the Turkish lira eased fears of a broader financial contagion.

The Dow Jones Industrial Average rose 112.22 points, or 0.45 per cent, to 25,299.92, the S&P 500 gained 18.03 points, or 0.64 per cent, to 2,839.96. The tech-heavy Nasdaq Composite added 51.19 points, or 0.65 per cent, to 7870.89.

Out today: conglomerate Wesfarmers, Fairfax Media, Woodside Petroleum, pharmaceuticals firm CSL and insurer IAG will release their results.

Asia

Asian stocks were headed for a mixed start to Wednesday trading after US shares closed higher and the dollar held at a 14-month high, with risk appetite showing signs of returning to global markets after the recent Turkey-induced turmoil.

Futures pointed to a muted open for Japanese equities, while Hong Kong contracts edged higher. Chinese tech stocks are back in focus after e-commerce company Vipshop slid more than 10 per cent post-earnings, with the weakness spreading to peers like Tencent and Alibaba in New York trading.

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Japan's Nikkei on Tuesday rebounded from a five-week low, posting its biggest one-day gain since March as export-driven firms benefited from a pause in the safe-haven yen’s strengthening while the battered Turkish lira firmed.

The Nikkei share average surged 2.3 per cent to 22,356.08, the biggest percentage gain since March 27. On Monday, it touched 21,851.32, the lowest level since July 11.

The broader Topix rose 1.6 percent to 1,710.95, with all of its 33 subsectors in positive territory.

In Hong Kong, stocks fell for a third straight session on Tuesday, after data showed further signs of cooling in China's economy and as trade war worries lingered.

The Hang Seng index fell 0.7 per cent to 27,752.93 points, while the China Enterprises Index lost 0.2 per cent to 10,744.31 points.

Europe

European shares rose slightly on Tuesday after two days of heavy selling as investors' anxieties over contagion from the Turkish currency crisis faded and reassuring data from Germany helped offset the latest wobbles in China's giant economy.

The pan-European STOXX 600 benchmark closed 0.1 per cent higher, with financials weighing the most on the index and euro zone banks down 0.5 per cent.

Banks have been the worst hit by concerns over Turkey, taking the index to a 21-month low, but investors were becoming more optimistic that banks' Turkey exposure was manageable.

In London, shares ended the day down 0.4 per cent after a choppy session, weighed down notably by lower copper prices as fallout from the Turkish lira crisis that has rattled global markets since Friday eased. The FTSE 100 closed down 0.4 per cent while the pan-European STOXX 600 was flat.

North America

Wall Street's three major indexes have risen with the S&P 500 posting its strongest gain in three weeks as a string of healthy earnings boosted investor optimism and a rebound in the Turkish lira eased fears of a broader financial contagion.

Gains were widespread on Tuesday, and the S&P 500 and the Dow Jones Industrial Average ended four-day losing streaks.

The Turkish lira regained some ground a day after it plunged to an all-time low. The rebound came as the country's central bank took steps to ease pressure on the currency.

Shares of major US banks reversed course on easing Turkey fears, with the S&P financial sector closing the session up 0.9 per cent.

Investors also focused on second-quarter results, as the reporting season draws closer to the finish line. So far, of 458 companies in the S&P 500 that have posted results, 79 per cent have topped Wall Street estimates.

Home Depot Inc beat consensus estimates, reporting stronger-than-expected sales despite signs of a slowdown in the US housing market. However shares of the home improvement chain - the first of the major brick-and-mortar retailers to post second-quarter earnings - slipped 0.5 per cent.

Shares of rival Lowe's Companies Inc rose 1.3 per cent. Coach handbag maker Tapestry Inc reported a 31 per cent jump in quarterly revenue. The company's shares jumped 12 per cent.

Advance Auto Parts Inc reached a one-year high and ended the session up 7.8 per cent after the company posted profit above estimates and announced a new share buy-back program.

All 11 of the major sectors in the S&P 500 closed in positive territory.

Tesla's shares dropped 2.5 per cent after the company said a special committee formed to negotiate taking electric car maker private had yet to see a firm offer from CEO Elon Musk.

Shares of Yum China Holdings climbed 4 per cent on news of a potential takeover by China Investment Corp and DEP Capital.

Grocer Kroger Co announced it would partner with Alibaba to sell its private label products on the e-commerce giant's Tmall platform in China. The stock closed up 2.4 per cent.

 

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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 senior 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 'regulated financial advice' under New Zealand law has 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. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. 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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