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Global Market Report - 24 September

Lex Hall  |  24 Sep 2018Text size  Decrease  Increase  |  
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Australia

Australian shares look set to open lower as Wall Street - which has ended its rally amid falling tech stocks - prepares for a major sector reshuffle.

In futures trading on Monday, the SPI200 futures contract was down 23 points, or 0.37 per cent, to 6169.0 at 8.30am Sydney time. The Australian dollar had a flat weekend and is buying 72.69 US cents, from 72.89 US cents at Friday's close.

The local market had ended the week higher on Friday, buoyed by strong gains in the mining sector, while dollar had its best week in more than a year as S&P Global Ratings revised its outlook to stable, from negative, removing the risk of a downgrade to Australia's triple-A credit rating and supporting bond prices.

But these gains look set to erode after trading volume on Wall Street spiked in anticipation of the S&P 500 sector change, when telecoms will be folded into a new sector called communications services, along with heavy-hitting stocks such as Facebook and Disney.

Copper, meanwhile, notched its biggest one-day advance since May 2013 as investors calculated that a trade dispute between the US and China could damage economic growth less than feared.

CoreLogic is expected to release capital city house price data on Monday.

Asia

Japanese stock indexes hit multi-month highs on Friday as ebbing concerns about global trade tensions and bullish views on the US economy supported commodities and manufacturing firms.

The Nikkei share average gained 0.8 per cent to 23,869.93, the highest close since January 24. The next milestone is the 24,129.34 level hit on January 23, a break of which would put the index at its highest since November 1991. For the week, the Nikkei added 3.4 per cent.

Meanwhile, the broader Topix gained 0.9 per cent to hit a four-month high of 1804.02.

China's stock markets surged on Friday before a long holiday weekend, with investor sentiment boosted by hopes that a government effort to boost domestic demand could help offset effects of an escalating trade war.

At the close, the blue-chip CSI300 index rose 3.0 per cent, its biggest one-day gain since May 2016, to end at 3410.49 points.

The Shanghai Composite Index gained 2.5 per cent to 2797.48 points. It was the Shanghai index's best week since March 2016.

Europe

Easing fears of a trade war further lifted European shares on Friday, with trade-sensitive sectors like miners and autos leading the advance.

The pan-European STOXX 600 rose 0.4 per cent, while the Euro STOXX 50 ended up 0.8 per cent. Both have had 10 straight sessions of gains.

The last time the STOXX 600 performed so strongly was in September last year, but for the Euro STOXX 50 it was the longest winning streak since 1997.

Deutsche Bank on Friday confirmed its overweight rating on European value stocks, mentioning among their buy-rated picks financials Allianz and BNP Paribas, carmaker Daimler and miner Glencore.

North America

Industrials led the Dow to a new closing high on Friday ahead of Monday's major sector reshuffle, capping a week that largely shrugged off trade worries.

Trading volume spiked to the highest level since February in anticipation of the S&P 500 sector change, when telecoms will be folded into a new sector called communications services, along with heavy-hitting stocks such as Facebook and Walt Disney.

While the Dow closed higher, the S&P 500 and the Nasdaq ended the session in negative territory. The S&P and the Dow posted weekly gains, with the Dow showing its biggest weekly percentage advance in over two months. The Nasdaq lost ground on the week.

Boeing, the United States' biggest exporter to China, boosted trade-sensitive industrials higher. The sector led the Dow’s advance.

Yields on long-dated US Treasuries edged down on Brexit anxieties even with Federal Reserve expected to hike key interest rates next week. Financial stocks headed lower, ending their recent rally.

Telecoms rose 1 per cent on its last trading day as a discrete major S&P sector, and was the index's biggest percentage gainer.

Major technology stocks ended the session lower, with Facebook, Apple, Amazon, Netflix and Google parent Alphabet down between 1.1 per cent and 1.9 per cent.

 

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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

© 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 '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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