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Global Market Report - July 13, 2018

Lex Hall  |  13 Jul 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to build on yesterday's 10-year record high following strong gains among US tech stocks and industrials.

The Australian futures index was up 24 points to 6241 at 8.30am Sydney time. The Australian dollar is buying 74.06 US cents, slightly up from yesterday's close of 73.84 US cents.

Strong showings from healthcare heavyweights and the major banks yesterday propelled the local share market to its highest close for a decade after a nutty day of trading.

The benchmark S&P/ASX200 closed up 52.7 points, or 0.85 per cent, at 6268.3 points on Thursday, the highest close since December 2007, while the broader All Ordinaries index gained 49.6 points, or 0.79 per cent, to 6349.8 points.

Asia

In Asia, the Shanghai Composite Index rose 2.2 per cent at the close, notching up its second 2 per cent plus move this week.

The yuan rose as much as 0.8 per cent in Hong Kong, after registering a 1.1 per cent late Wednesday - its biggest loss since January 2016.

The Shanghai index is heading for its first weekly advance since May after sinking more than 20 per cent from this year's high amid concern its economy will struggle to cope with both deleveraging and a trade war.

Japan's Nikkei rebounded on Thursday as a weaker yen offered a temporary respite to trade war fears and lifted sentiment, while index-heavyweight SoftBank soared after a source said a US hedge fund took a $1 billion stake in it.

The Nikkei share average ended 1.2 percent higher at 22,187.96, outperforming the broader Topix, which was up 0.5 percent at 1709.68.

In Hong Kong, the Hang Seng Index rose 0.6 per cent, led by Sunny Optical Technology Group and Geely Automobile Holdings.

Europe

A buoyant media sector drove European stocks higher on Thursday following a new bid for British pay-TV firm Sky, helping shares stabilise after heavy losses in the previous session, when fears of an escalating trade war hit markets.

Sky shares leapt to an 18-year high on Thursday as investors bet a transatlantic battle for the European pay-TV group had further to run, after Comcast's $US34 billion bid trumped an offer from Rupert Murdoch made just hours earlier. Sky's shares are up 95 per cent since Fox made its first bid in 2016, and have risen 55 per cent in the last year.

The pan-European STOXX 600 index closed 0.8 per cent higher with gains in the healthcare and consumer sectors, which have recently been favoured for their defensive qualities in the face of worries that a trade war could hurt global growth.

The region's media index rose 2.4 per cent, with Sky up 3.4 per cent.

Europe's media index has outperformed the market this month, underpinned by the bidding war for Sky but also helped by expectations of a lift to advertising sales from the World Cup soccer matches for broadcasters such as France's TF1 and Britain's ITV.

North America

In the US top technology names hit record highs and industrials rebounded from losses driven by trade worries the day before.

The technology index rose 1.8 per cent, the day's best-performing sector, and the group is now leading year-to-date gains among sectors. The S&P industrials index rose 1.1 per cent. Health care also gained about 1.1 per cent.

CA was the standout, rising 18.7 per cent and was the biggest percentage gainer in the S&P 500 after chipmaker Broadcom announced a surprise $US18.9 billion deal to buy the business software company. Broadcom slumped 13.7 per cent.

Facebook, Microsoft and Amazon hit all-time highs and, along with Apple and Alphabet, drove gains in the S&P 500 and Nasdaq.

The US late Tuesday threatened to impose tariffs on $US200 billion worth of Chinese goods. China said on Thursday the two countries have not been in touch about restarting talks and while it does not want a trade war, it would fight if necessary.

Boeing and Caterpillar, among the hardest hit by the trade dispute, rose more than 1 per cent each on Thursday, boosting the Dow.

The Dow Jones Industrial Average rose 224.44 points, or 0.91 per cent, to 24,924.89, the S&P 500 gained 24.27 points, or 0.87 per cent, to 2798.29 and the Nasdaq Composite added 107.31 points, or 1.39 per cent, to 7823.92.

The stock market value of Microsoft, which jumped 2.2 per cent to $US104.19, also rose above $US800 billion for the first time, joining Apple, Amazon and Alphabet in that $US800 billion club and putting it in line as a contender to be the first US company to reach a $US1 trillion market cap.

Earnings will take centre stage on Friday, when some big Wall Street banks, including JPMorgan Chase, report results. S&P 500 companies overall are expected to post second-quarter profit growth of around 21 per cent, according to Thomson Reuters data.

 

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Morningstar with AAP

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 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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