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Global Market Report - June 15, 2018

Lex Hall  |  15 Jun 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is set to open higher today following gains on Wall Street but the Australian dollar has slipped more than half a cent to below 75 cents.

At 8.30am the Australian futures index was up 33 points at 6058. The dollar has dipped to 74.75 US cents, down from 75.59 US cents yesterday.

Wall Street’s key indexes rose - bar the Dow Jones - closed higher amid strong US retail sales numbers a day after the Federal Reserve increased its key interest rate and hinted at the possibility of two more hikes by the end of the year.

Australian shares closed yesterday weaker after soft local job figures and weak economic data out of China weighed on a market already under pressure from overnight falls on Wall Street.

The benchmark S&P/ASX200 index closed down 0.11 per cent at 6016.6 points, while the broader All Ordinaries fell 0.06 per cent to 6129.6 points.

Telstra gained strongly yesterday, up 5.1 per cent to $2.90 following an upgrade to its outlook for from analysts at JP Morgan.

RBA assistant governor Luci Ellis will address the Infrastructure Partnerships Australia at lunchtime.

Asia

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Japan's Nikkei share average dropped on Thursday morning after the Fed’s rate rise, while concern about a US-China trade war also soured sentiment.

The Nikkei fell 0.99 per cent to 22,738.61. Shares of exporters such as carmakers and electronics stocks came under pressure. Nissan Motor Co fell 1.3 per cent, Hitachi shed 2.05 per cent and Panasonic Corp dropped 1.89 per cent.

Hong Kong stocks ended lower, after the Fed raised interest rates and struck a more hawkish tone, while downbeat Chinese data and renewed trade war fears curbed risk appetite.

The Hang Seng index ended 0.9 per cent lower at 30,440.17 points, while the China Enterprises Index lost 0.7 per cent to 11,950.70 points.

The Hong Kong Monetary Authority (HKMA) raised the base rate charged through overnight discount window by 25 basis points on Thursday to 2.25 per cent after the Fed raised interest rates by a quarter of a percentage point.

China's economy is finally starting to cool under the weight of a multi-year crackdown on riskier lending that is pushing up borrowing costs for companies and consumers, with data pointing to a broad slowdown in activity in May.

China's central bank sparked concerns over the health of the economy earlier in the day when it left short-term rates unchanged, surprising markets which had expected it to follow the Fed's hike, as it has tended to do.

Investors were kept in check amid concerns about US threats to impose tariffs of billions of dollars on Chinese goods.

The blue-chip CSI300 index closed down 0.40 per cent at 3773.37 points, while the Shanghai Composite Index slipped 0.18 per cent to 3044.16 points.

Europe

Britain's main stock index rose on Thursday after the European Central Bank signalled interest rates would remain steady through to the next northern summer, easing investors' concerns about tightening monetary policy.

The ECB announced it would end its unprecedented bond purchase scheme by the end of this year, but said it would maintain rates at record lows at least through the summer of 2019.

The FTSE 100 climbed 0.81 per cent to 7765.79, a three-week high, having fallen as much as 0.7 per cent earlier when a more hawkish rates outlook from the Fed weighed on equities.

Stock benchmarks across Europe enjoyed their best day in 2-1/2 months as they benefited both from a weaker euro and the surprise extension of lower interest rates.

The pan-European STOXX 600 and the euro zone STOXX jumped 1.4 and 1.3 per cent, while the exporter-heavy German DAX index gained 1.7 per cent to 13,107.10, as the euro fell to a session low. Along with France’s CAC 40, they had their strongest gains since April 5.

North America

The S&P 500 has edged up and the Nasdaq has reached another record closing high after the European Central Bank said it would avoid raising interest rates until mid-2019, and data showed US economic strength.

The strong US retail sales numbers came a day after the Fed’s rate rise.

The ECB announced it would end its bond-purchase program at year-end but signalled that any interest rate hike was still distant.

The Dow Jones Industrial Average fell 25.89 points, or 0.10 per cent, to 25,175.31, the S&P 500 gained 6.86 points, or 0.25 per cent, to 2782.49 and the Nasdaq Composite added 65.34 points, or 0.85 per cent, to 7761.04.

 

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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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