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Global Market Report - July 5, 2018

Lex Hall  |  05 Jul 2018Text size  Decrease  Increase  |  
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Australia

The Australian sharemarket is poised for modest gains despite a public holiday in the US and nerves among Asian investors ahead of the deadline for Donald Trump's trade tariffs to take effect.

The Australian futures index was up 12 points at 6149 at 8.30am (AEST). The Australian dollar has weakened, buying 73.84 US cents.

World stocks have been dragged lower by growing anxiety ahead of Friday’s deadline to impose tariffs on Chinese imports, while the yuan rebounded after China’s central bank moved to calm investors.

The MSCI All-Country World index, which tracks shares in 47 countries, was down 0.1 per cent on the day.

Locally, Woolworths has signed a 15-year agreement with Caltex that adds another 125 Caltex sites to its network of petrol stations.

Australian shares closed lower yesterday, hurt by falls in banking and energy stocks on concerns about heightened trade tensions between the US and China.

The benchmark S&P/ASX200 index dropped 26.8 points, or 0.43 per cent, at 6,183.4 points, while the broader All Ordinaries index fell 29.2 points, or 0.46 per cent, at 6,273.6 points.

CBA fell 0.5 per cent to $73.59, National Australia Bank lost 1.3 per cent to $27.38, Westpac fell 0.5 per cent to $29.25, and ANZ finished 0.07 per cent higher at $28.10.

The energy sector also lost further ground, with Caltex and Woodside Petroleum down 1.7 per cent to $32.47 and 0.5 per cent to $35.28 respectively.

out today: RBA's head of economic analysis Alexandra Heath will address the Urban Development Institute of Australia at 1.05pm.

Asia

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.25 per cent, a day after it hit a nine-month low. Japan's Nikkei erased earlier losses to stand flat by late afternoon.

Mainland Chinese shares dropped, with CSI300 Index off 0.7 per cent.
In the currency market, the yuan bounced back from an 11-month low following moves by China's central bank on Tuesday to calm jittery financial markets.

The Chinese currency fetched 6.6177 per dollar in onshore trade, off Tuesday’s low of 6.7204.

Major currencies were treading water as traders fretted about the fallout of the intensifying trade frictions between Washington and the rest of the world.

Europe

The pan-European STOXX 600 index was down 0.2 per cent in morning trade in London, while Germany's exporter-heavy DAX also declined 0.3 per cent and the FTSE 100 fell 0.2 per cent.

A Chinese court temporarily banned Micron Technology from selling chips in China, the world's biggest memory chip market, hitting shares in US and Asian semiconductor stocks.

Europe's tech sector was led 0.5 per cent lower by falls in chipmakers STMicro and Infineon, which were both down around two per cent.

The euro was off by 0.2 per cent at $US1.16380 while the dollar fetched 110.51 yen, down 0.1 per cent.

North America

Washington has said it would implement tariffs on $US34 billion ($46 billion) of Chinese imports on July 6, and Beijing has vowed to retaliate in kind on the same day.

Concerns about the outbreak of a global trade war have, among other factors, prevented a sustained recovery in global stock markets since a violent selloff in February.

The US has listed another 284 product lines valued at $US16 billion that it will target with tariffs, including semiconductors and a broad range of electronics. It also threatened another 10 per cent tariffs on up to $US400 billion of Chinese goods.

Washington has also launched a national security investigation into car and truck imports, with Trump threatening Europe with a 20 per cent tariff on car imports while various countries have also already taken retaliatory steps against US tariffs on steels and aluminium products.

More than 40 countries have voiced deep concern at the World Trade Organisation about possible US measures.

Oil prices edged up following a report of tightening US fuel inventories amid an outage at Syncrude Canada oil sands facility in Alberta, which usually supplies the US.

International benchmark Brent futures rose 0.3 per cent to $US77.98 a barrel.

US light crude futures traded down 0.4 per cent at $US73.86 per barrel, after rising above $75 for the first time in more than three years on Tuesday.

Copper, sometimes seen as barometer of global economic strength given its wide use in power and construction, hit a fresh nine-month low of $US6,423 a tonne on Wednesday.

 

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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 content 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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