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Global Market Report - 21 August

Glenn Freeman  |  21 Aug 2018Text size  Decrease  Increase  |  
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Australia

Australian shares have opened slightly higher, in line with a higher finish on Wall Street overnight, but gains could be capped as investors stay focused on local company results.

In futures trading, the SPI 200 futures contract was up six points, or 0.1 per cent, to 6,320 points at 8am, pointing to the higher open for local stocks today.

Overnight, major US indexes rose on optimism over trade talks between the United States and China, but pared the gains after US President Donald Trump criticised the Federal Reserve's raising of interest rates.

The Dow Jones Industrial Average ended 89.37 points, or 0.35 per cent, to 25,758.69, the S&P 500 gained 6.92 points, or 0.24 per cent, to 2,857.05, while the tech-heavy Nasdaq Composite added 4.68 points, or 0.06 per cent, to 7,821.01.

In local equities, mining giant BHP Billiton (ASX: BHP), energy producer Oil Search (ASX: OSH), Seven West Media (ASX: SWM) and hospitals operator Healthscope (ASX: HSO) will be among the major companies reporting results.

The Australian dollar is buying 73.07 US cents, from 73.03 US cents on Monday. 

Asia

Japan’s Nikkei fell on Monday as chip-related stocks weakened, tracking their U.S. peers' declines on Friday, while trading was thin as investors awaited developments from trade talks expected between the United States and China this week.

The Nikkei share average dropped 0.3 percent to 22,199.00. The broader Topix declined 0.3 percent to 1,692.15, with only 983 million shares changing hands, the lowest level since early April.

Optimism continues to build ahead of Wednesdays scheduled talks between China's Xi Jinping and US President Donald Trump, hoped to ease trade tariff tensions.

Overnight, the CSI 300 in China rose for the first time in six days, as Shanghai- and Shenzhen-listed stocks rose 1.2 per cent. The index has fallen by about 20 per cent for 2018, largely on concerns about a slowing Chinese economy and US-China trade tensions.

Europe

As markets around the world focus on the potential for a positive outcome from the US-China trade talks, Europe's exporter-heavy Xetra Dax index outperformed its regional peers, gaining 1 per cent.

The Europe-wide Stoxx 600 rose 0.6 per cent as German stocks rose sharply and London’s FTSE 100 gained 0.4 per cent

Turkey's lira fell another 1.4 per cent — but stayed clear of last week's record low against the dollar a week ago. Both S&P Global and Moody’s lowered Turkey’s debt rating further into junk territory late last week.

North America

In New York, the S&P 500 ended yesterday 0.2 per cent higher at 2,857 – 0.6 per cent short of the record high of 2,872.87 reached in January.

The Dow Jones Industrial Average rose 0.4 per cent while the tech-heavy Nasdaq Composite edged 0.1 per cent higher.

Though scepticism remains about the potential for a positive outcome from Wednesday's talks between US & China leaders, the S&P 500 continued to inch back towards the record high it set last January. Gains for energy stocks offset a weak showing from the technology sector.

The dollar eased slightly against the euro and yen, while Treasury yields fell, as markets await the release – also on Wednesday – of the latest Federal Reserve meeting minutes.

Brent oil rallied after three straight weeks of losses, as concerns about slowing demand, largely fuelled by uncertainty over Chinese growth, were offset by expectations for supply restrictions.

 

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Morningstar with AAP, Reuters and Bloomberg 

Glenn Freeman is senior 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 senior 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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