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Global Market Report - June 13, 2018

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

The local share market is set to open lower today as investors brace for the Federal Reserve's remarks on the economic outlook and cautiously welcome the Trump-Kim denuclearisation summit.

At 8.30am (AEST) the Australian futures index is down 8 points at 6047. The Australian dollar is buying 75.75 cents.

Asian markets gained, but Europe's fell with stockholders appearing unimpressed with the lack of detail in the US-North Korea deal.

Wall Street closed mainly positive with US investors apparently more focused on the imminent conclusion of the Fed’s meeting and looking for hints if it would move to raise rates three or four times this year.

Australian shares closed slightly higher yesterday, supported by energy, health care and consumer-exposed stocks. The benchmark S&P/ASX200 index rose 0.15 per cent, at 6054.4 points, while the broader All Ordinaries rose 0.13 per cent to 6164.8 points.

Out today: WBC-MI Consumer Confidence June; RBA governor Philip Lowe speaks at the Ai Group in Melbourne at midday.

Asia

Japanese shares rose on Tuesday, buoyed by optimism the US-North Korea summit in Singapore could eventually pave the way to denuclearisation of the Korean peninsula.

The benchmark Nikkei average advanced 0.33 per cent to 22,878.35, its highest closing since May 22 and not far from its four-month intra-day high of 23,050.39. MSCI's Asia ex-Japan stock index was firmer by 0.1 per cent.

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Hong Kong stocks ended higher, after President Trump and Kim Jong-un signed a "comprehensive" deal aimed at the denuclearisation of the Korean peninsula, while Washington committed to provide security guarantees for its old enemy.

The Hang Seng index closed up 0.1 per cent at 31,103.06 points, while the China Enterprises Index ended 0.3 per cent higher at 12,206.57 points.

Shanghai stocks recovered from early losses to end higher on Tuesday, as sentiment improved after President Trump and the North Korean leader signed the deal. The Shanghai Composite Index ended up 0.9 per cent at 3079.80 points, snapping a three-session losing streak.

The blue-chip CSI300 index ended 1.2 per cent higher at 3825.95 points.

Europe

Losses in miners and oil majors sent Britain's top share index into the red on Tuesday, while housebuilding stocks tumbled after weak results from Crest Nicholson piled extra pressure on a sector already hit by a run of poor economic data.

The Trump-Kim summit had limited impact on UK and European stock markets. The FTSE 100 fell 0.4 per cent, while the STOXX 600 edged down 0.1 per cent.

With a crucial vote on Brexit getting under way in the British parliament, a volatile sterling currency helped rein back the FTSE's gains.

In Europe, the regional FTSEurofirst 300 index lost 0.01 per cent, and Germany's DAX was flat at 12,842.30.

The European Central Bank meets on Thursday, with some expecting it to provide guidance for ending its bond-buying program at the end of this year.

North America

US stocks have ended mainly slightly higher, boosted by gains in technology and utilities shares, though investors were cautious ahead of the Federal Reserve's policy decision.

The Fed is widely expected to raise interest rates for the second time this year when it concludes its policy meeting on Wednesday.

Investors are focused on how the Fed characterises its monetary policy, looking for hints if it would move to raise rates three or four times this year.

But shares of S&P 500 utilities, up 1.3 per cent, and technology, up 0.6 per cent, helped to lift the S&P 500.

Investors also awaited a court ruling, expected after the closing bell, that would decide the fate of AT&T Inc’s $US85 billion offer for Time Warner. Shares of AT&T ended up 0.5 per cent, while Time Warner was flat and Charter Communications gained 2.8 per cent.

Investors appeared to shrug off the US-North Korea summit as the Trump-Kim joint statement gave few details on how the goal would be achieved.

While defence stocks such as Raytheon, Lockheed Martin and Northrop Grumman dipped, the broader markets saw little impact from the summit.

The Dow Jones Industrial Average fell 0.01 per cent, to 25,320.73, the S&P 500 gained 0.17 per cent, to 2786.85 and the Nasdaq Composite added 0.57 per cent, to 7703.79.

 

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Morningstar with AAP

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

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