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Global Market Report - June 14, 2018

Lex Hall  |  14 Jun 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is poised to open lower today following the US Federal Reserve's decision to raise interest rates, and flag two more increases this year.

At 8.30am (AEST) Australian futures are down 5 points at 6022. The Australian is trading at 75.83 US cents, up from 75.64 US cents yesterday.

The Reserve Bank governor Philip Lowe delivered a speech yesterday focusing on weak wages growth. He said Australians had little appetite for productivity-boosting tax reform, and that businesses risked a shortage of skilled workers because they had focused on cost-cutting.

Shares in Australia's biggest gas pipeline company, APA Group, soared 21 per cent to $10.00 yesterday after the company received an indicative $13 billion takeover bid from a Chinese consortium led by CK Infrastructure Holdings.

The Australian share market yesterday closed lower amid the rate decisions in the US and Europe. The benchmark S&P/ASX200 fell 0.51 per cent to 6023.5 points while the broader All Ordinaries index fell 0.51 per cent 6133.1 points.

Out today: ABS to release labour force data for May.

Asia

Japanese stocks edged higher on Wednesday but gains were limited as many investors awaited the Fed’s rate decision, while Toshiba jumped after announcing a major share buyback.

Toshiba Corp surged 6.7 per cent after saying it would buy back up to about 700 billion yen ($144 billion) of its shares. The Nikkei 225 ended 0.38 per cent higher at 22,966.38.

Investors turned attention from Tuesday’s US-North Korea summit in Singapore to the Fed's coming decision and statement.

Hong Kong stocks ended lower as a slump in shares of telecommunications giant ZTE Corp unnerved market participants, while investors braced for the Fed's policy decision later in the day.

The trade frictions between the US and China have resurfaced ahead of Friday, by when Washington is expected to release a list of about $US50 billion worth of Chinese goods that will be subject to a 25 per cent tariff.

The Hang Seng index closed down 1.22 per cent at 30,725.15, while the China Enterprises Index ended down 1.4 per cent at 12,035.63 points.

China stocks also ended lower, on nervousness over ZTE Corp. The blue-chip CSI300 index ended 0.98 per cent lower at 3788.34 points, while the Shanghai Composite Index closed down 0.97 per cent at 3049.80 points.

Europe

The FTSE 100 ended flat on Wednesday as a weaker pound supported export-oriented shares, helping offset a fall in Just Eat on fresh competition worries and weaker energy stocks.

The index fluctuated within a tight range as investors waited for a string of central bank decisions this week, starting with the US Federal Reserve later in the day.

Just Eat fell 4.7 per cent, leading fallers on the FTSE, after Deliveroo stepped up competition against its rival, saying it would allow restaurants to use their own riders for orders placed through its app.

The FTSE finished where it started at 7703.71. Trading in European shares was hesitant as investors awaited the Fed’s move, while Inditex rose after results and Just Eat was bruised by intensifying competition.

Benchmarks barely budged, with all the action at the stock level. The pan-European STOXX 600 ended up 0.2 per cent while Germany's DAX added 0.38 per cent to close at 12,890.58.

North America

US stocks have ended a choppy session lower after the Fed raised its interest rates as expected and projected a slightly faster pace of rate hikes in the coming months.
Two additional lifts are now expected by the end of the year, compared to one previously.

In its decision on Wednesday, the Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 and 2 per cent.

The losses came on a day Wall Street had opened slightly in the black, after a court approved AT&T’s $US85 billion ($112.2 billion) takeover of Time Warner after the closing bell on Tuesday.

Time Warner shares jumped 1.73 per cent after approval of the AT&T deal, which is expected to trigger other corporate takeovers, and AT&T dropped 2.13 per cent.

The Dow Jones Industrial Average fell 0.46 per cent to 25,202.99, the S&P 500 lost 0.40 per cent to 2775.66 and the Nasdaq Composite fell 0.11 per cent to 7695.70.

 

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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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