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Global Market Report - 26 September

Lex Hall  |  26 Sep 2018Text size  Decrease  Increase  |  
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Australia

Australian shares are poised for a flat open after a mixed performance on Wall Street offset gains in the energy sector ahead of an expected US Federal Reserve interest rate hike.

In futures trading on Wednesday, the SPI200 futures contract was up 6 points, or 0.1 per cent, to 6186.0 at 0800, pointing to a subdued open for the ASX.

The Australian dollar is buying 72.48 US cents, down from 72.46 US cents at Tuesday's close.

On Wall Street overnight, the expected Federal Reserve interest rate hike took its toll, offsetting a boost from the energy sector.

The Dow Jones Industrial Average fell 0.26 per cent to end at 26,492.21 points, and the S&P 500 lost 0.13 per cent to 2915.56.

The tech-heavy Nasdaq rose 0.18 per cent to 8007.47.

Australian shares were subdued on Tuesday, closing marginally higher, with the financial sector weighing on the market and offsetting strong gains from commodity-related stocks.

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But energy shares were up 2.2 per cent as oil prices surged to a four-year high amid a global supply standoff.

Those gains were retraced overnight after US President Donald Trump called again on OPEC to boost crude output and stop raising prices.

Out today: agricultural chemical supplier Nufarm Limited is expected to deliver its full-year earnings report, a day after it announced a trading halt for equity raising.

Last month Nufarm warned of a steep drop in full-year earnings, blaming a lack of rain for a poor winter growing season.

Energy supplier AGL is also scheduled to hold its annual general meeting.

Asia

China's stock markets fell on Tuesday, their first trading day after new US and Chinese tariffs on each others goods kicked in on Monday, while property firms plunged on worries that a property pre-sale system may be scrapped.

At the close, the Shanghai Composite index was down 16.35 points or 0.6 per cent at 2797.48. Stock markets in China were closed on Monday for a holiday.

The blue-chip CSI300 index ended 0.9 per cent lower, with its financial sector sub-index falling 1.44 per cent. The consumer staples sector fell 0.95 per cent while the healthcare sub-index rose 0.11 per cent.

Shares of Chinese property developers plunged, with the real estate sub-index losing 4.4 per cent after six provinces were told to decide whether to retain or scrap a property pre-sale system that enables developers to secure funds before project completion. Property shares had fallen sharply in Hong Kong on Monday on the prospect of the system being scrapped.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.07 per cent while Japan's Nikkei index closed 0.29 per cent higher.

Europe

European shares closed higher on Tuesday boosted by gains among oil stocks and optimism over the Italian budget while British clothing retailer Next rallied after raising its profit guidance.

The pan-European STOXX 600 index rose ended the day up 0.5 per cent, recovering part of the losses suffered in the previous session when worries over a protracted US-Sino trade war sparked profit-taking.

The oil and gas index jumped 1.7 per cent and reached its highest level since May.

Oil majors BP, Shell and ENI rose 2.9 per cent, 2.5 per cent and 2.4 per cent respectively more after Brent hit a fresh four-year high amid looming US sanctions against Iran and an apparent reluctance by OPEC and Russia to raise output to offset the expected to hit to supply.

North America

The S&P 500 energy index added 0.57 per cent as Brent oil hit a four-year high, boosted by imminent US sanctions on Iranian exports, and OPEC and Russia's reluctance to raise output.

US consumer confidence unexpectedly rose in September, bringing it closer to levels last seen in 2000, the Conference Board said, underscoring strength in the labour market and the overall economy.

The data pushed the S&P 500 consumer discretionary index up 0.59 per cent.

The Philadelphia semiconductor index dropped 1.70 per cent, weighing on the S&P 500 technology index, after brokerages Raymond James and KeyBanc cut their ratings on a number of chipmakers.

Intel fell 2.13 per cent after Raymond James downgraded the stock.
Buoyed by strong economic growth and deep corporate tax cuts, the S&P 500 has gained 9 per cent so far in 2018.

But five of the S&P 500 sector indexes are down this year to date, including the consumer staples index, down 5.6 per cent.

Consumer staples on Tuesday lost 0.73 per cent. The other six are higher, led by the technology index's 19 per cent rally.

The Nasdaq Composite rose 0.18 per cent to 8007.47. Amazon provided the greatest lift to the technology-heavy index, jumping 2.08 per cent.

In extended trade, Nike fell 2.89 per cent after it reported quarterly results.

CenturyLink tumbled 8 per cent after chief financial officer Sunit Patel left the company in a surprise move to join T-Mobile US to oversee its integration with Sprint.

 

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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 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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