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Global Market Report - 5 September

Lex Hall  |  05 Sep 2018Text size  Decrease  Increase  |  
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Australia

Australian shares look set to open lower on the back of a fall on Wall Street overnight as trade concerns lingered and declines in Facebook and Nike shares weighed on the major indexes.

In futures trading, the SPI200 futures contract was down 18 points, or 0.29 per cent, to 6262 points at 8.30am Sydney time. The Australian dollar is buying 71.80 US cents, from 72.05 US cents on Tuesday.

On Wall Street the Dow Jones Industrial Average is down 12.34 points, or 0.05 per cent at 25,952 points, while the S&P500 is down 4.8 points or 0.17 per cent at 2896 points.

The tech-heavy NASDAQ index is down 18.29 points or 0.23 per cent at 8091 points.

Shares in Nike have fallen nearly 3 per cent as the shoe giant faced backlash over its decision to put NFL quarterback-turned-activist Colin Kaepernick at the centre of its latest ad campaign.

Locally, Westpac will pay a record $35 million fine for failing to properly assess whether thousands of people could afford to repay their home loans.

Economists are tipping the national accounts to show 0.7 per cent growth in the June quarter when they are released on Wednesday. The rise would mean the economy has expanded by 2.8 per cent compared with a year before.

Asia

Hong Kong stocks ended higher on Tuesday, with sentiment buoyed by a surge in Chinese telecom giants China Unicom and China Telecom on merger speculation.

The Hang Seng index ended 0.9 per cent higher at 27,973.34, while the China Enterprises Index closed up 0.7 per cent at 10,890.63 points.

China Unicom surged roughly 6 per cent and China Telecom jumped about 4 per cent, on media reports that Beijing is reviewing the possibility of merging the companies to accelerate the development of 5G.

Japan's Nikkei edged lower in choppy trade on Tuesday as lingering global trade concerns saw investors staying on the sidelines.

The Nikkei share average ended 0.1 per cent lower at 22,696.90, after switching frequently between positive and negative territory.

Europe

The UK's top shares index ended the session in the red on Tuesday amid growing trade war fears and as a drop among mining stocks and a fall in WPP shares weighed.

The blue-chip FTSE 100 index closed down 0.62 per cent at 7457.86 points.

WPP dropped 6.2 per cent after the advertising company cut its profit margin guidance as the group restructures.

The Stoxx Europe 600 fell 0.7 per cent, or 2.68 points, to 379.83 as trade tensions and weakness in emerging markets hit sentiment.

The DAX dropped 1.1 per cent and the CAC 40 was off 1.3 per cent even as the euro fell 0.4 per cent against the dollar to $US1.161.

North America

US stocks have fallen as trade concerns lingered and declines in Facebook and Nike shares weighed on Wall Street's major indexes, though data showing US manufacturing activity accelerated in August kept losses in check.

Facebook shares fell 2.6 per cent on Tuesday after brokerage MoffettNathanson downgraded the social media company, warning of revenue growth deceleration.

Shares of other technology companies, including Alphabet, Microsoft and Twitter also slid, while the S&P 500 technology index dropped 0.3 per cent.

Nike shares fell 3.2 per cent as the company faced a backlash after it chose Colin Kaepernick, the first NFL player to kneel during the national anthem as a protest against racism, to participate in a new ad campaign.

Concerns about trade, including talks between the US and Canada to renegotiate the North American Free Trade Agreement, also took a toll, investors said.

Talks between the US and Canada are scheduled to resume on Wednesday after the two parties ended their talks on Friday without a deal.

Amazon bucked the negative sentiment. It briefly touched $US1 trillion in market capitalisation, joining Apple in achieving that milestone, after its shares rose as much as 1.9 per cent to hit a record $US2,050.50. Amazon ended the session up 1.3 per cent to $US2039.51.

Earlier, the indexes pared losses after data from the Institute for Supply Management showed US manufacturing activity accelerated to a more than 14-year high in August, boosted by a surge in new orders.

Consultations on a US proposal for new tariffs on Chinese goods are set to end on Thursday, after which US President Donald Trump can follow through on plans to impose levies on another $US200 billion of Chinese imports, though it is unclear how quickly that will happen.

 

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Morningstar with AAP, Reuters and Bloomberg 

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

© 2020 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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