Australia

Australian shares are poised for a flat open after mixed results on Wall Street overnight, with tech giants dragging but the trade-buoyed Dow hitting record highs.

The SPI200 futures contract was up 9 points, or 0.151 per cent, to 6,126.0 at 8am Sydney time on Wednesday. The Aussie was buying 71.87 US cents, from 71.99 US cents at Tuesday's close.

Overnight, the Dow Jones industrial Average rose 122.73 points, or 0.46 per cent, to a record of 26,773.94, but the S&P 500 and Nasdaq were dragged down again by a drop in Facebook shares.

The Australian market closed lower on Tuesday, dragged down by banking and health care stocks, while the local dollar took a hit after the Reserve Bank held the cash rate at 1.5 per cent for the 26th straight month.

In federal politics, Treasurer Josh Frydenberg has stressed all states and territories will be better off under changes to the GST after some have expressed fear the reforms will cost them billions of dollars.

Treasurers from across Australia will meet in Melbourne on Wednesday to discuss introducing a 75 cent floor in GST payments.

The plan was hatched to protect Western Australia from its share again crashing to the mining boom lows of less than 30 cents in the dollar. Eastern states fear they will be worse off under the deal.

Out today: AiG performance of services September; Building approvals for August

Asia

Hong Kong's main Hang Seng index closed at a two-week low on Tuesday, dragged by financial and property stocks, while China's H-shares index fell most in more than three months amid signs of weakness in China's manufacturing sector.

Traders said US President saying it was "too soon" for Washington to talk to Beijing about working out a deal on trade also dampened appetite for taking risk.

At close of trade, the Hang Seng index was down 662.14 points, or 2.4 per cent, at 27,126.38. The Hang Seng China Enterprises index fell 2.4 percent to 10,754.56. HSI financial sub-index was 2.8 per cent lower and property sector dipped 2.7 per cent.

MGM China led slide in gaming stocks after Chinese territory of Macau posted a slightly slower-than-estimated growth in gambling revenues in September.

Japan's Nikkei edged up to a fresh 27-year high on Tuesday, building on recent strength thanks to upbeat earnings hopes, while Ono Pharmaceutical surged on news that a Nobel Prize was awarded to researchers for a cancer-fighting method used in its drug Opdivo.

The Nikkei share average ended 0.1 per cent higher at 24,270.62, hovering at levels not seen since November 1991.

Europe

British shares retreated on Tuesday as the positive impact of a new North American free trade pact faded globally and shares of Royal Mail hit a record low the day after the 500-year-old postal service issued a profit warning.

The top FTSE 100 index fell 0.3 per cent to 7474.55 points, outperforming continental indices hit by concerns over Italy's 2019 budget though British bank stocks were impacted.

The exporter-heavy index did not enjoy the usual accounting boost from the pound falling to a three-week low, with investors anxious about infighting in the ruling Conservative party over Prime Minister Theresa May's Brexit plan.

The biggest weight was Royal Mail, which lost 8.4 per cent to close at 358.6p, its lowest level since listing.

Miners were the top boost to the index with Randgold Resources, Evraz, and BHP Billiton up 1.7 to 1.8 per cent as zinc hit its highest in nearly two months on falling stockpiles and rising Chinese premiums.

North America

The Dow hit a record closing high but another drop in Facebook shares weighed on both the S&P 500 and Nasdaq, driving both to finish in the red.

Dividend-paying sectors were the best performers of the major S&P sectors on Tuesday, with utilities up 1.3 per cent and consumer staples up 0.6 per cent. Facebook, Netflix and Amazon, part of the so-called FANG group of stocks, kept the Nasdaq in check.

The Dow was boosted by names such as Boeing and Caterpillar as investors remained upbeat on trade-sensitive companies following the deal negotiated between the US, Canada and Mexico.

Facebook fell 1.91 per cent, in a third straight session of declines totalling 5.6 per cent. The social media company, which on Friday disclosed its worst security breach ever, faces continuing calls for legislation to force technology firms to take responsibilities for online security seriously.

The NYSE FANG+TM index, an equal-weighted index of five core FANG stocks, was down 4.2 per cent for September.

The smallcap Russell 2000 index was off 1.01 per cent. Smaller names, which had been viewed as being more insulated to trade pressures, are losing their lustre following Sunday's late-night North American trade agreement. The index is now down nearly 5 per cent from its August 31 high.

Financials were little changed, shaking off earlier losses stemming from a drop in Italian banks after a senior politician in one of Italy's ruling parties said most of the country's economic problems would be resolved if it readopted a national currency.

 

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Morningstar with AAP, Reuters 

Lex Hall is content editor, Morningstar Australia

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