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Global Market Report - 8 November

Lex Hall  |  08 Nov 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to take a lead from Wall Street's overnight surge, while the Aussie dollar has continued to climb in the wake of the US midterms, reaching near 2½-month highs and pushing towards 73 US cents.

The SPI200 futures contract was up 42 points, or 0.72 per cent, to 5905.0 at 8am Sydney time on Thursday, pointing to a jump at open for the ASX after banking and energy stocks lifted the local market during choppy trade on Wednesday.

The Australian dollar is steady after climbing overnight, buying 72.79 US cents, up from 72.59 US cents on Wednesday.

On Wall Street, major US indexes climbed during a post-midterm plunge on tech and healthcare stocks, with investors speculating that tighter regulations in these sectors would be harder to push through a divided Congress.

The Dow Jones Industrial Average rose 444.78 points, or 1.74 per cent, to 26,079.79, the S&P 500 gained 47.9 points, or 1.74 per cent, to 2803.35 and the Nasdaq Composite added 162.37 points, or 2.2 per cent, to 7538.34.

Oil prices have slipped, continuing a recent slide after surging US crude output hit another record and domestic inventories rose more than expected, while copper also edged lower, and iron ore went the other way.

In local finance news on Thursday BHP Billiton will hold its annual general meeting in Adelaide, while Macquarie Media will host its own in Sydney.

James Hardie and News Corp are expected to detail first-quarter results while an ACCC decision on the Fairfax and Nine merger is expected.

ASIA

In Hong Kong, the Hang Seng index ended largely flat at 26,147.69, while the China Enterprises Index closed 0.1 per cent higher at 10,641.48 points.

China stocks ended a volatile session lower, with weak earnings and an uncertain economic outlook outweighing government pledges of support for wavering markets. At the close, the Shanghai Composite Index was 0.7 per cent lower at 2641.34 points. The blue-chip CSI300 index also lost 0.7 per cent.

Citic Securities dropped 2.4 per cent after the company reported a 28 per cent fall in net profit in October from a month earlier. An index tracking securities firms ended 1.9 per cent lower.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.3 per cent while Japan's Nikkei index closed down 0.3 per cent.

EUROPE

Company results announcements drove the biggest movers on the STOXX 600, with Scout24, Ahold and Vestas rising rising by between 6.2 per cent and 7.6 per cent after strong updates. Adidas fell 3.6 per cent after the sportswear company cut its revenue target after a fall in sales in western Europe.

Weaker than expected revenue growth sent the world's biggest security firm G4S down nearly 18 per cent to its lowest since August 2016 for its worst day in seven years.

Spanish banks were in the spotlight after a government move to counteract a court ruling that would have forced customers to pay mortgage stamp duty, pledging to pass a law to oblige banks to pay the tax.

Banking shares, which had rallied initially on the court ruling, came off early highs after the government's announcement but largely held gains after it became clear that the new law would not be applied retrospectively.

Shares in Caixabank Sabadell, BBVA, Santander and Bankia were up by between 1.8 per cent and 4.1 per cent.

NORTH AMERICA

US stocks have surged as investors piled into growth sectors such as technology and healthcare on relief that the outcome of the midterm elections was as expected.

Democrats won control of the House of Representatives, while Republicans tightened their grip on the Senate, pointing to a political gridlock in Washington.

The technology and healthcare sectors rose more than 1.5 per cent each on Wednesday, with investors betting that a gridlocked Congress would not be able to push through restrictive regulations, a fear that has weighed on the growth sectors.

A Democrat-controlled House will hamper President Donald Trump's pro-business agenda, but the results for Republicans were no worse than feared, allowing investors to buy back into a market that had its worst month in seven years in October.

Following a steep selloff in October, the S&P 500 remains down more than 5 per cent from its record high, as uncertainty about the election and fears about rising interest rates and trade wars roil stocks globally.

The Federal Reserve starts its two-day monetary policy meeting on Wednesday, where it is expected to keep interest rates unchanged, but a rate hike in December is largely priced in.

But, financial stocks slipped 0.27 per cent, led by a 0.52 per cent decline in bank stocks.
The S&P energy index jumped 1.1 per cent as oil prices rose on a report that Russia and Saudi Arabia are discussing whether to cut crude output next year.

Anadarko Petroleum surged 7.1 per cent and Noble Energy jumped 4.3 per cent after Colorado voters a rejected a tougher rule on oil and gas drilling, which spurred shares of companies operating in the state.

 

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Morningstar with AAP, Reuters

Lex Hall is content editor, Morningstar Australia

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