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Global Market Report - July 30, 2018

Lex Hall  |  30 Jul 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to start the week slightly lower after technology stocks dragged Wall Street into the red.

The Australian futures index was down 26 points, or 0.42 per cent to 6225 at 8.30am. The Australian dollar is buying 74.01 US cents, from 73.88 US cents on Friday.

On Wall Street, the Dow Jones Industrial Average finished last week down 76.01, or 0.3 per cent at 25,451 points, while the S&P500 was down 18.62 points or 0.66 per cent at 2818 points.

The Nasdaq index was down 114 points or 1.46 per cent at 7737 points.

On Friday, Twitter shares plunged more than 20 per cent on the US market over a decline in monthly active users, while Facebook shares dived 19 per cent the previous day after the social media giant forecast years of lower profit margins.

Locally, five times as many companies are likely to boost dividends from a year earlier than cut among the top 100 stocks reporting in August, according to data compiled by Bloomberg. More than a quarter of the expected payments are coming from two of the world's largest miners, the data show.

The benchmark S&P/ASX 200 index closed 55.7, or 0.89 per cent higher, at 6300.2 on Friday, while the broader All Ordinaries rose 53.9 points, or 0.85 per cent, to 6391.5 points.

Last week, the benchmark index gained 14 points and had lifted 1.7 per cent so far during July. The share market is on track to record four straight months of gains, the longest run since 2013.

The local reporting season begins this week, with results from Vodafone Australia tomorrow, before investors look to Rio Tinto on Wednesday.

Economic data to be released this week include CoreLogic capital city house prices for the week, ABS building approvals for June and ABS retail trade for June.

Asia

Japanese shares closed higher on Friday, taking comfort from signs of rapprochement between the US and Europe over trade issues, though investors remained cautious ahead of next week's Bank of Japan policy review.

The benchmark Nikkei share average hit a one-week closing high of 22,712.75, and ended the week 0.56 pct firmer.

In China, the blue-chip CSI300 index ended 0.4 per cent down at 3521.23, while the Shanghai Composite Index closed 0.3 per cent lower at 2873.59 points. For the week, SSEC was up 1.6 per cent, while CSI300 gained 0.8 per cent.

Hong Hong stocks ended flat on Friday, as expectations of more stimulus from Beijing offset worries over a China economic slowdown as trade frictions with the US intensify.

The Hang Seng index rose 0.1 per cent, to 28,804.28, while the China Enterprises Index gained 0.2 per cent, to 11,047.42 points.

Europe

In Europe, more than 70 companies on the pan-European STOXX 600 will report this week. It is a big week for the region's banks, which have underperformed the broader index with a 10 per cent fall so far this year.

The big guns on the list include BNP Paribas, Intesa Sanpaolo, Lloyds, ING, Barclays, SocGen, RBS, Credit Agricole and Unicredit. With issues like stuttering euro zone growth, a long-running struggle to keep up with US rivals as well as bad loans and trouble in Turkey, there will be plenty to drill into.

European stocks rose to fresh six-week highs on Friday, helped by an easing of fears over US tariffs and some solid company results.

Shares in consumer goods company Reckitt Benckiser, supermarket retailer Carrefour, construction group Vinci, BT and bank BBVA rose following well-received results, lifting the pan-European STOXX 600 benchmark, closing 0.6 per cent higher. The index ended the week up 1.7 per cent.

North America

Wall Street's major indexes have closed lower as weak earnings reports from major technology companies led to a big drop for the sector.

Intel Corp shares sank 8.6 per cent after the chipmaker's data centre business missed estimates amid stiff rivalry from Advanced Micro Devices. AMD shares rose 3.2 per cent.

Twitter shares plunged 20.5 per cent after the social media network reported a decline in monthly active users, versus the increase analysts had expected, and warned of further drops as it deletes fake accounts.

The S&P 500 technology index fell 2 per cent, the most among the major S&P sectors.
Shares of Apple, which is set to report quarterly results on Tuesday, fell 1.7 per cent. Shares of Microsoft and Alphabet, which had soared after both companies recently reported strong quarterly results, dropped 1.8 per cent and 2.5 per cent, respectively.

The pressure on tech stocks started on Thursday after Facebook gave a dismal forecast that caught investors off guard about growth prospects in a sector that has led the market's march toward record highs.

 

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Morningstar with AAP, Reuters and Bloomberg 

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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