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Global Market Report - 27 June

Glenn Freeman  |  27 Jun 2019Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open lower after a mixed result on Wall Street overnight.

The SPI200 futures contract was down 15 points, or 0.23 per cent, at 6,554 at 7am in Sydney, suggesting an early dip for the benchmark S&P/ASX200 on Thursday.

On Wall Street, the Dow Jones Industrial Average finished down 0.04 per cent, the S&P 500 was down 0.12 per cent and the tech-heavy Nasdaq Composite was up 0.32 per cent.

In Australia yesterday, local shares were down slightly at the close, as investors largely ignored the Wall Street sell-off spurred by the Fed.

The S&P/ASX 200 Index slid 17.5 points, or 0.3 per cent, to 6640.5 while the broader All Ordinaries lost 18.4 points, or 0.3 per cent, to end the session at 6716.1.

The Aussie dollar is buying 69.86 US cents, from 69.75 US cents on Wednesday.

Ahead today: New Zealand ANZ business confidence index for June released.

Asia

China stocks ended slightly lower on Wednesday, weighed down by losses in the financial sector, as investor remain cautious ahead of the anticipated trade meeting between US President Trump and China President Xi Jinping.

Both the blue-chip CSI300 index and Shanghai Composite Index fell 0.2 per cent, to 3,794.33 and 2,976.28.

The largest percentage gainers on the main Shanghai Composite index were Danhua Chemical Technology Co Ltd , up 10.12 per cent, followed by Shanghai Shenqi Pharmaceutical Investment Management Co Ltd, gaining 10.06 per cent and CSSC Offshore & Marine Engineering Group Co Ltd, up by 10.02 per cent.

In Hong Kong, stocks were up slightly at the close, though trade levels were low as investors remain cautious ahead of this week's US-China trade meeting at the G20 summit.

The Hang Seng index ended up 0.1 per cent at 28,221.98 points, while the China Enterprises Index gained 0.2 per cent to 10,766.06 points.

Across the region, MSCI’s Asia ex-Japan stock index was weaker by 0.09 per cent, while Japan’s Nikkei index closed down 0.51 per cent to 21,086.59.

Chip equipment makers bucked the weakness and gained after Micron Technology Inc said on Tuesday it had resumed some microchip shipments to Huawei Technologies Co Ltd and still expects demand for its chips to recover later this year.

Tokyo Electron surged 2.2 per cent and Advantest Corp jumped 3.5 per cent.

Europe

European shares fell for their fourth straight session yesterday, amid disappointment about the US Fed's comments on interest rates overnight and uncertainty ahead of the G20 meeting between US and China.

The pan-European STOXX 600 index fell 0.3 per cent, on course to end a three week gaining streak fuelled by expectations of more monetary stimulus globally and hopes of a revival in China-US trade talks.

In the UK, the FTSE 100 edged down 0.08 per cent, or 6 points, to 7,416.39.

Real estate, healthcare and utilities led declines in Europe on Wednesday, while banks – which tend to benefit from higher interest rates – auto and energy stocks, outperformed.

Drugmakers Novartis and Roche fell 2 per cent and 0.7 per cent respectively, and weighed on Swiss shares which declined 0.6 per cent amid a row over stock market equivalence between Switzerland and the European Union.

German shares outperformed as industrial giant Thyssenkrupp's share price jumped nearly 7 per cent on news of a possible offer for its elevator business.

The DAX was up 0.14 per cent, or 16.8 points, to 12, 245.32.

North America

The S&P 500 ended lower as gains in technology stocks were offset by a drop in healthcare shares, and investors parsed mixed messages over prospects for a deal to end a trade war between the United States and China.

Technology shares led the Nasdaq higher while the Dow Jones Industrial average posted a nominal loss on Wednesday.

US stocks struggled for direction throughout the session as market participants pondered whether a planned meeting between US President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit in Japan would yield any progress in the two country's protracted tariff dispute.

The market initially perked up after US Treasury Secretary Steven Mnuchin was quoted by CNBC interview as saying the trade deal between the US and China is "about 90 per cent" complete. His comments were later restated to show he was using the past tense to describe progress in the talks.

Trump later said while it was "absolutely possible" to avoid imposing additional tariffs on imported Chinese goods, he was "very happy where we are now".

The Dow Jones Industrial Average on Wednesday fell 11.4 points, or 0.04 per cent, to 26,536.82; the S&P 500 lost 3.6 points, or 0.12 per cent, to 2,913.78; and the Nasdaq Composite added 25.25 points, or 0.32 per cent, to 7,909.97.

A rise in crude prices boosted energy stocks. Energy and tech companies were the biggest percentage gainers among the 11 major sectors of the S&P 500, while defensive utilities, real estate and consumer staples saw the largest losses.

Chipmakers led the tech rally. The Philadelphia SE Semiconductor index rose 3.2 per cent after Micron Technology posted upbeat results and forecast a recovery in chip demand. Micron's shares jumped 13.3 per cent.

Apple shares advanced 2.2 per cent after the iPhone-maker confirmed that it had bought self-driving startup Drive.ai and after Trump suggested in an interview that the European Union was out of line with its lawsuits against American tech firms, saying the US was the one that should be taking action.

EU antitrust regulators on Wednesday hit Broadcom with demands that the chipmaker drop its exclusivity clauses with TV and modem makers as part of its ongoing investigation. Nevertheless, Broadcom's shares gained 1.8 per cent.

General Mills was the biggest percentage loser on the S&P 500, dropping 4.5 per cent after the packaged food company missed quarterly sales estimates, hit by lower snacks demand in North America.

is senior editor for Morningstar Australia

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