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Global Market Report - June 12, 2018

Lex Hall  |  12 Jun 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to open higher after shrugging off tensions over the G7 summit and focusing on today's historic meeting between US President Donald Trump and North Korean leader Kim Jong-un in Singapore.

The markets seemed to take the trade row in their stride and looked instead to the impending summit between Trump and Kim, a historic bid to bridge differences and avoid nuclear confrontation on the Korean peninsula.

Investors are also anticipating this week's meetings of three of the world's top central banks: the US Federal Reserve, the European Central Bank and the Bank of Japan.

At 8.30am (AEST), the share price futures index was up 27 points, or 0.48 per cent, at 6078. The local currency was trading at US76.10 cents, from US75.77c on Friday.

The Australian share market lost ground on Friday, following low trading volumes as investors held fire ahead of the G7 meeting in Canada.

The Australian share market was closed for the Queen’s Birthday public holiday yesterday. On Friday, the benchmark S&P/ASX200 index closed down 0.2 per cent at 6045.2, and the broader All Ordinaries index closed down 0.2 per cent, at 6156.8 points.

Asia

Japanese stocks rose amid thin trade as investors looked ahead to the looming the US-North Korea summit, with traders ascribing part of the broader gains to buying in futures.

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Japan's Nikkei 225 index closed up 0.48 per cent at 22,804.04, while MSCI's Asia ex-Japan stock index was firmer by 0.31 per cent.

Hong Kong shares rose slightly ahead of a US-North Korea summit that investors hope might pave the way for an end to the nuclear stand-off on the Korean peninsula.

The Hang Seng index gained 0.34 per cent to 31,063.70, while the China Enterprises Index gained 0.1 per cent to 12,172.03.

Shanghai stocks fell for a third straight session, on investor concerns over the liquidity conditions in the market.

The Shanghai Composite Index touched its lowest level since last May before closing down 0.47 per cent at 3,052.78 points, while the blue-chip CSI300 index was flat at 3,779.98 points.

Europe

Export-oriented firms led British shares higher on Monday as a weaker pound stood to make them more competitive, while hopes of a bidding war boosted satellite provider Inmarsat.

Investors were cautious, however, as the pound's weakness resulted from an unexpected decline in UK factory output in April, raising concern that the British economy's sluggish start to the year continued.

The FTSE 100 index ended up 0.73 per cent at 7737.43, its highest close in a week and helped by gains in big international companies such as British American Tobacco and Diageo, up 1.2 and 2.4 per cent respectively.

European banking stocks and Italian shares jumped after Italy's new economy minister promised to keep the country in the euro, dissipating investors' fears of a euro zone break-up and boosting sentiment after a fraught G7 summit.

Euro zone banks rose 3 per cent, helping the pan-European STOXX 600 gain 0.8 per cent while Italy's FTSE MIB jumped 3.4 per cent and Spain's IBEX 1.6 per cent.
Germany's DAX rose 0.60 per cent to 12,842.91.

North America

All three major US stock indexes have closed slightly higher as investors eyed the looming US-North Korea summit in Singapore while shrugging off the weekend’s fractious meeting of the G7.

Trump announced the US’s withdrawal from the G7’s joint communique following a series of bellicose tweets aimed at Prime Minister Justin Trudeau after the Canadian leader announced retaliatory tariffs on goods imported from its ally to the south.

The Fed is widely expected to raise key interest rates on Wednesday, and on Thursday the ECB is seen moving toward a roll back of its crisis-era stimulus scheme.

The Dow Jones Industrial Average on Monday rose 0.02 per cent, to 25,322.31, the S&P 500 gained 0.11 per cent, to 2,782 and the Nasdaq Composite added 0.19 per cent, to 7659.93.

 

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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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