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Global Market Report - 22 November

Lex Hall  |  22 Nov 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to climb at the open as a two-day global sell-off shows eases, with Wall Street rising overnight on strong retail data and reinvigorated tech stocks.

The SPI200 futures contract is up 18 points, or 0.32 per cent, to 5,660.0, at 0800 AEDT on Thursday, pointing to rise for the ASX after a late rally from banking and health care lifted it from near two-year lows on Wednesday.

A slight lift at open would see the benchmark continue to hover above the 5640 to 5650 points mark, which many analysts view as a floor of resistance.

The Aussie dollar is steady, buying 72.61 US cents after rising from 72.31 cents at Wednesday's close.

Wall Street recouped losses overnight as strong earnings from Foot Locker and gains in technology stocks lifted investor sentiment ahead of the Thanksgiving holiday.

The Dow Jones Industrial Average rose 99.38 points, or 0.41 per cent, to 24,565.02, the S&P 500 gained 17.49 points, or 0.66 per cent, to 2659.38 and the Nasdaq Composite added 89.75 points, or 1.3 per cent, to 6998.57.

Oil prices have risen from the lowest level in months, while copper was up overnight as a softer US dollar and higher equities triggered fund buying.

Iron ore has dipped slightly, but gold has risen to a two-week high.

ASIA

Hong Kong stocks ended higher on Wednesday, aided by a sharp rebound in technology shares. The Hang Seng index rose 0.5 per cent, to 25,971.47, while the China Enterprises Index gained 0.2 per cent, to 10,486.07.

On the mainland, the blue-chip CSI300 index rose 0.3 per cent, to 3226.49, while the Shanghai Composite Index gained 0.2 per cent to 2651.51 points.

Foxconn Technology Group, the biggest assembler of Apple iPhones, aims to cut $US2.9 billion from expenses in 2019 as it faces "a very difficult and competitive year", according to an internal company memo.

The iPhone business will need to reduce expenses by 6 billion yuan next year and the company plans to eliminate about 10 per cent of non-technical staff, according to the memo obtained by Bloomberg.

One of the world's largest money managers says the toll of declining business confidence will eventually make President Donald Trump cut a trade deal with China - helping revive emerging markets in 2019.

While it's unlikely that Trump and his counterpart Xi Jinping reach a truce at the Group-of-20 summit in Argentina next week, their meeting will probably be the first step toward an agreement in 2019, said Chris Gaffney, president of world markets at TIAA Bank in St. Louis.

The MSCI Asia Pacific Index fell 0.4 per cent and Japan's Topix index lost 0.6 per cent.

EUROPE

Italy's 10-year bond yields fell 12 basis points to 3.50 per cent, having whipsawed earlier on conflicting headlines from Rome. Yields touched 3.72 per cent Tuesday, the highest level since October 19.

UK shares jumped more than 1 per cent for their best day in two months, helped by oil and banking stocks and upbeat results from Johnson Matthey, which soothed investor concerns about slowing earnings growth.

The FTSE 100 ended up 1.5 per cent, snapping three days of losses and outperforming its euro zone peers. The FTSE 250 closed up 1.2 per cent.

Still sentiment was fragile as Prime Minister Theresa May met the EU's chief executive in Brussels to discuss a blueprint for Britain's future ties.

Kingfisher, Europe's second largest home improvement retailer, fell 3 per cent after reporting weak quarterly sales in France and announcing plans to exit Russia, Spain and Portugal, which raised questions over its plan to increase profit.

NORTH AMERICA

World stock markets have risen, with Wall Street tipping higher on gains in technology and energy shares.

The benchmark S&P 500 stock index ended higher after falling 3.5 per cent over the previous two sessions, but a strong rebound gave way to a sell-off late in the session that left gains in modest territory.

The Dow Industrials ended little changed in thin trading volume a day ahead of the US Thanksgiving holiday.

Amazon.com, Alphabet and Facebook rose more than one per cent. Energy advanced with a rise in oil prices.

Crude oil prices climbed after US government data showed strong demand for petrol and diesel, though concerns over rising crude supply remained. US crude prices on Tuesday sank to one-year lows.

US stocks also found support on speculation that the US Federal Reserve could ease up on its path of interest-rate hikes, said Chad Morganlander, senior portfolio manager at Washington Crossing Advisors in Florham Park, New Jersey.

A report from MNI suggested that the Fed may pause its rate hiking cycle as early as spring 2019.

US stock and bond markets will be closed on Thursday for the Thanksgiving holiday and open for a half-day on Friday.

MSCI's gauge of stocks across the globe gained 0.38 per cent.

 

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Morningstar with AAP, Reuters

Lex Hall is content editor, Morningstar Australia

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