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Global Market Report - August 8, 2018

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

Australian shares are expected to trade sideways, with gains in material stocks to be offset by lagging financials.

In futures trading, the SPI200 futures contract was flat at 6202 points at 8.30am Sydney time. The Australian dollar was at 74.18 US cents, slightly down from 74.24 US cents on Tuesday.

The nation's largest bank, Commonwealth Bank, reported 4.8 per cent drop in its annual unaudited cash profit, which is expected to drive financial stocks lower.

Embattled wealth group AMP has reported a fall in underlying interim profit to $495 million.

Materials are expected to gain on stronger commodity prices.

The benchmark S&P/ASX 200 index fell 0.3 per cent on Tuesday. Wall Street finished stronger overnight as a strong second-quarter earnings season fuelled optimism about the US economy's strength.

The Dow Jones Industrial Average jumped 0.5 per cent to 25,628 points, the S&P 500 gained 0.28 per cent to 2858 points and the tech-heavy NASDAQ index rose 0.31 per cent to 7,883 points.

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Asia

Japan's Nikkei rose 0.7 per cent to 22,662.74.on Tuesday after index-heavyweight SoftBank jumped 6.5 per cent on the back of strong first-quarter results, while a rebound in Chinese shares also helped overall sentiment.

The Shanghai Composite index was up 2.3 percent at 2768.16, bouncing after a battering in recent days and helping calm market sentiment.

The Hang Seng index ended up 429.32 points or 1.54 per cent at 28,248.88. The Hang Seng China Enterprises index closed 1.53 per cent higher to 10,866.10.

The sub-index of the Hang Seng tracking energy shares ended 2.8 per cent higher, while the IT sector closed up 1.36 per cent, the financial sector ended 1.05 per cent firmer and property sector closed up 2.55 per cent.

Europe

European shares rose on Tuesday and made their way back to positive territory for 2018 as investors cheered UniCredit results, oil prices boosted energy groups and a positive open on Wall Street lifted sentiment.

The STOXX 600 closed up 0.6 per cent at 390.83 points, a 0.4 per cent gain on the year. The pan-European index however still remain 13 points below its January peak of 403.72 points.

UniCredit shares rose 2.9 per cent after Italy's biggest lender by assets reported second-quarter profits fell less than expected.

Commerzbank shares fell 1.5 per cent to the bottom of Germany's DAX, however, as investors reacted badly to a weaker-than-expected capital buffer, and its forecast of higher costs for its full year of 2018.

North America

The S&P 500 inched nearer to a record high, lifted by Amazon, Alphabet and Microsoft, and a strong second-quarter earnings season that fuelled optimism about the US economy's strength.

The S&P 500 last closed at a record high on January 26, and a new peak would reassure investors who have worried in recent months that almost a decade of gains on Wall Street might be ending.

After a 0.28 per cent rise on Tuesday, the S&P 500 was up almost 7 per cent in 2018.

A sharp rally in tech stocks has already helped the Nasdaq recover much faster than the broader markets from a sell-off in February, hitting a record high late last month.

The financial sector rose 0.48 per cent as higher yields on the 10-year US Treasury note buoyed bank stocks.

The S&P 500 energy index gained 0.72 per cent after US sanctions on Iranian goods went into effect, intensifying concerns about supply.

Google parent Alphabet rose 1.47 per cent and Microsoft moved up 0.69 per cent, driving a 0.33 per cent gain in the S&P information and technology index.

Amazon added 0.80 per cent. The internet retail and infrastructure heavyweight provided the greatest lift to the S&P 500, followed by Alphabet and Microsoft.

Tesla jumped 10.99 per cent after chief executive Elon Musk said he was considering taking the electric carmaker private.

A strong earnings season has helped US stocks cushion some of the impact from the simmering trade issues.

The CBOE Volatility Index, Wall Street's "fear gauge," dropped to 10.93 points, its lowest since January.

 

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Lex Hall is a Morningstar content editor, based in Sydney.

© 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 senior editor for Morningstar Australia

© 2021 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 'regulated financial advice' under New Zealand law has 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. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. 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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