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Global Market Report - 27 November

Lex Hall  |  27 Nov 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to rally at the open after online retailers helped lift Wall Street overnight, while oil prices have also clawed back lost ground.

But it could be another day in the red for the local miners after iron ore plunged and other industrial metals, including copper, also slipped.

At 8am Sydney time, the SPI200 futures contract is up 46 points, or 0.81 per cent, to 5724.0, pointing to an early jump for the ASX after commodity-based stocks weighed the down the local bourse throughout the previous session.

The Aussie dollar has edged lower, buying US72.30 cents, down from US72.47 cents yesterday.

The three major US indexes are each up by more than 1 per cent, with the S&P 500 setting a course for its biggest percentage gain in nearly three weeks amid the expected frenzy of Cyber Monday discounts and free shipping.

The Dow Jones Industrial Average rose 279.52 points, or 1.15 per cent, to 24,565.47, the S&P 500 gained 32.68 points, or 1.24 per cent, to 2,665.24 and the Nasdaq Composite added 108.83 points, or 1.57 per cent, to 7047.81.

All 11 major sectors of the S&P 500 were trading in positive territory. China’s steel prices have dropped, while most industrial metals are down on caution over the outcome of trade talks between US President Donald Trump and Chinese President Xi Jinping later this week that could influence demand for commodities.

In local finance news, Harvey Norman will hold its annual general meeting in Sydney, while the Nine-Fairfax merger faces a final hurdle in the Federal Court.

ASIA

Stocks in Hong Kong gained on Monday, shrugging off losses in Mainland China, as investors saw signs of the US Federal Reserve slowing its pace of hiking interest rates. The expectation lifted sectors sensitive to interest rates, such as financials and property.

The Hang Seng index ended 1.7 per cent higher at 26,376.18, and the Hang Seng China Enterprises index rose 1.3 per cent to 10,521.53.

Japanese shares rose on Monday, taking Wall Street's losses in stride to touch a one-week high, with an upcoming World Expo in Osaka lifting the market.

The Nikkei share average ended the day up 0.8 per cent at 21,812.00, posting its second session of gains. The index briefly rose to 21,838.10, its highest since November 19.

The broader Topix was up 0.2 per cent at 1632.20.

EUROPE

European shares closed higher on Monday after new-found optimism on Italy's budget tug-of-war with Brussels lifted shares in Milan while speculation about further mergers and acquisitions in telecoms boosted stocks in the sector.

The pan-European STOXX 600 climbed 1.2 per cent and Italy's FTSE MIB led the way with a 2.8 per cent jump.

Italy's banks index jumped 4.8 per cent, its strongest day since June, while the sector in the euro zone gained 2.9 per cent.

A drop in Italian bond yields to two-month lows, due to hopes the government will agree to curb spending to avoid a clash with Brussels, drove the relief rally in lenders that have large sovereign bond portfolios.

Italy's governing coalition may reduce next year's budget deficit target to as low as 2 per cent of gross domestic product to avoid disciplinary action from Brussels, two government sources said on Monday.

The move set off a rally in financial markets but it was unclear if the downward revision would be enough to satisfy the European Commission.

The goal in the draft budget is now 2.4 per cent of GDP, much higher than the 0.8 per cent set by the previous government, prompting European partners to first threaten a formal rebuke on October 23.

NORTH AMERICA

US stocks have gained, helped by shares of retailers on the back of expectations of blockbuster sales on the largest online shopping day of the year, and as technology shares rose after taking a beating last week.

Shoppers who missed out on deals on Black Friday are expected to flock to online sites on Cyber Monday.

The shopping day is expected to rake in $US7.8 billion in sales, according to Adobe Analytics, which tracks about 80 per cent of all online transactions from the top 100 US retailers.

Shares of e-commerce giant Amazon jumped 3.3 per cent on Monday, while the largest US consumer electronics retailer, Best Buy, rose 3.3 per cent.

All of the 11 main S&P sectors were trading higher and the S&P 500 retailing index rose 2.27 per cent.

Also helping sentiment was oil prices, which rose to pare some of its losses from the near 7 per cent fall on Friday and lifted the shares of energy companies up 1.6 per cent.

Wall Street's main indexes fell more than 3 per cent last week, with the Dow and the Nasdaq posting their biggest weekly percentage declines since March, on plunging oil prices, worries about slowing global growth and peaking corporate earnings.

The S&P 500 on Friday closed 10.2 per cent lower from its record closing high on September 20, confirming a correction for the second time in the year.

The technology sector rose 1.76 per cent after posting its worst week in eight months last week.
Other members of the so-called FAANG group - Facebook, Apple, Netflix and Google-parent
Alphabet - rose between 1 per cent and 2 per cent.

Nvidia rose 3.3 per cent after Credit Suisse began coverage of the chipmaker with an "outperform" rating.

 

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