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Global Market Report - 7 November

Lex Hall  |  07 Nov 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to edge higher at the open after Wall St held onto small overnight gains, with investors cautious ahead of US mid-term election results.

The SPI200 futures contract was up 11 points, or 0.19 per cent, to 5861.0 at 8am Sydney time on Wednesday, pointing to a slight rise for the ASX after banking, energy and resources stocks lifted the bourse on Tuesday.

The Australian dollar has climbed overnight, and is buying 72.26 US cents, from 72.16 on Tuesday after the Reserve Bank kept the official cash rate at a record low of 1.5 per cent.
GDP is now expected to grow by 3.5 per cent in 2018 and 2019, up from 3 per cent.

Stocks rose on Wall Street overnight as strong earnings and easing of trade tensions lifted materials and industrial sectors, but trading volumes were light amid uncertainty about the outcome of the mid-term vote

The Dow Jones Industrial Average was up 141.44 points, or 0.56 per cent, at 25,603.14, the S&P 500 was up 13.93 points, or 0.51 per cent, at 2752.24 and the Nasdaq Composite was up 49.99 points, or 0.68 per cent, at 7378.84.

Oil prices fell to a new eight-month low a day after Washington granted sanction waivers to top buyers of Iranian oil, while gold prices fell as US equities and the dollar firmed.
Copper prices also dipped overnight.

In local finance news on Wednesday, Virgin Australia, Commonwealth Bank, and Dominos Pizza will hold their annual general meetings.

Commonwealth Bank earlier posted a 5.7 per cent fall in first-quarter unaudited cash profit as higher funding costs put pressure on margins, while higher bad debts also hurt.

ASIA

Hong Kong shares erased early losses and ended higher on Tuesday after China's premier said the country would take targeted policy steps to support private companies.

At the close, the Hang Seng index was 0.7 per cent higher at 26,120.96 points while the China Enterprises Index was up 0.8 per cent at 10,632.64 points. The sub-index of the Hang Seng tracking energy shares jumped 2.1 per cent, the IT sector rose 0.1 per cent and the financial sector was 0.5 per cent higher while the property sector gained 1.6 per cent.

Shares rallied late in the day after Chinese Premier Li Keqiang said China will not resort to strong monetary stimulus, but instead it will take targeted policy steps to support private companies and smaller businesses. Li also said China will step up efforts on reducing taxes, fees and market trading costs.

In Tokyo, Toyota Motor surged 2.1 per cent after the company raised its full-year operating profit forecast by 4.3 per cent to ¥2.4 trillion from the previously ¥2.3 trillion and said it would buy back up to ¥250 billion of its own shares.

The Nikkei rose 1.1 per cent to 22,147.75, recouping much of Monday's 1.6 per cent drop. Buying was particularly strong in recently beaten-down stocks, with 32 of the Topix's 33 subsectors in positive territory.

Apple suppliers were sold after the Nikkei reported Apple told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR.

Japan Display fell 3.7 per cent, TDK shed 1.9 per cent and Nitto Denko fell 2.5 per cent.

EUROPE

European shares ended a choppy session in negative territory on Tuesday as investors punished companies like Zalando that missed expectations.

The pan-European STOXX 600 and the euro zone's leading index both dipped 0.3 per cent.

Zalando shares fell 8.5 per cent after Europe's biggest online-only fashion retailer reported its slowest rate of sales growth since it was launched a decade ago, and recorded a loss due in part to unseasonably warm weather.

NORTH AMERICA

US stocks have ticked higher in thin trading, supported by strong earnings and a rebound in technology stocks from a two-day selloff, while investors brace for the outcome of US midterm elections.

Polls point to President Donald Trump's Republican party losing control of the House of Representatives, which could curb some of his policy-making power.

A political gridlock between the White House and congress could hinder Trump's pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for equities.

Apple rose 1.1 per cent on Tuesday, after its biggest two-day loss since January 2013, helping the beaten-down technology sector gain 0.74 per cent.

The materials sector got a boost from strong results from Mosaic and FMC, which rose 6.8 per cent and 2.8 per cent, respectively.

The trade sensitive industrial sector rose 0.69 per cent after Chinese Vice President Wang Qishan said Beijing was ready to hold discussions and work with the US to resolve trade disputes.

Mylan NV jumped 12.9 per cent after the drug maker beat analysts' estimates for third-quarter profit.

 

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Morningstar with AAP, Reuters

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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