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Global Market Report - 20 September

Lex Hall  |  20 Sep 2018Text size  Decrease  Increase  |  
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Australia

Australian shares are set to edge lower at the open after mixed results on Wall Street overnight, but the local dollar has continued its recent rally.

In futures trading, the SPI200 futures contract was down four points, or 0.06 per cent, to 6179 points at 8.30am Sydney time. The Australian dollar was buying 72.65 US cents, from 72.49 US cents at Wednesday's close.

Major US indexes were a mixed bag overnight, with the S&P 500 and the Dow Jones industrial average rising and the tech-heavy Nasdaq ending the session slightly lower.

The Dow rose 158.8 points, or 0.61 per cent, to 26,405.76, its highest closing level since late January, as rising Treasury yields boosted the financial sector and global trade worries subsided.

The S&P 500 gained 3.64 points, or 0.13 per cent, to 2907.95 and the Nasdaq Composite dropped 6.07 points, or 0.08 per cent, to 7950.04.

Copper jumped to its highest in three weeks, boosted by a weaker US dollar after a new round of US-China trade tariffs proved not as costly as expected, but iron ore dipped slightly.

Metal prices had buoyed Australia's heavyweight mining sector on Wednesday, driving local shares to a higher close.

Out today: Premier Investments - the owner of Smiggle and Peter Alexander - will detail full-year results, as will investment firm Washington H Soul Pattinson.

Asia

Hong Kong shares rose to a two-week high on Wednesday, joining a broad rally in Asian markets, as investors saw limited impact from an escalating US-China trade war, and bet on more stimulus from Beijing to bolster growth.

The Hang Seng index rose 1.2 per cent to 27,407.37 points, while the China Enterprises Index gained 1.8 per cent to 10,741.69 points.

China will use the continuing trade war as an opportunity to replace imports, promote localisation and accelerate the development of high-tech products, the state-run People's Daily newspaper said in a front-page article on Wednesday.

China's main Shanghai Composite index closed up 1.14 per cent at 2699.95 points, while its blue-chip CSI300 index ended up 1.32 per cent. Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.94 per cent, while Japan's Nikkei index closed up 1.08 per cent.

Europe

A rally in European shares extended for a second day on Wednesday thanks to gains in trade-sensitive mining and autos stocks.

The STOXX 600 and leading euro zone stocks both rose 0.3 per cent to two-week highs with sentiment buoyed by hopes that the United States and China will return to the negotiating table after the latest tariff round.

Basic materials were the biggest sectoral gainer, up 3.1 per cent, after copper prices rose sharply. It was the sector's best day in two months.

Heavyweight miners Antofagasta and Anglo American rose 5.9 per cent and 5.1 per cent respectively.

Danske Bank fell 3.4 per cent following the resignation of its CEO and an updated on a money laundering probe that prompted the bank to cut its full-year outlook.

North America

The S&P 500 and the Dow Jones industrial average have risen, with the Dow hitting its highest closing level since late January as rising Treasury yields boosted the financial sector and trade worries subsided.

The tech-heavy Nasdaq ended the session slightly lower.

Financial companies rose 1.8 per cent, the biggest percentage gainer among the major S&P 500 sectors, as the benchmark 10-year Treasury yield hit a four-month high.

Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America ended the session up between 2.6 and 3.3 per cent.

Of the 11 major sectors of the S&P 500, seven ended in negative territory. So-called defensive stocks lost ground as rising yields provided investors with an attractive alternative to higher-risk equities. The utilities sector was the biggest loser, falling 2.1 per cent.

The technology sector edged 0.1 per cent lower, pulled down by a 1.3 per cent decline in Microsoft.

The company raised its quarterly dividend by about 10 per cent, but Morgan Stanley said the hike was below the company's 12-month trailing operating income growth.

Amazon.com slid 0.8 per cent as European Union regulators looked into whether the largest online retailer was using merchant data to stifle competition.

Among the other components of the FAANG group of stocks, Netflix was also down slightly. Facebook rose 1.7 per cent, while Apple and Google parent Alphabet had nominal gains.

Meanwhile, Chinese Premier Li Keqiang has dismissed talk that Beijing is deliberately weakening its currency to bolster exports.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is content editor, Morningstar Australia

© 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

© 2020 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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