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Global Market Report - June 19, 2018

Lex Hall  |  19 Jun 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open higher despite losses on Wall St as trade war fears rattled investors, who sought refuge in energy shares.

At 8.30am (AEST) the Australian futures market was up 35 point to 6154. The Australian dollar is down slightly, buying 74.22 US cents.

Key US, European and Tokyo markets closed in the red in the offshore session while China’s key indexes were closed.

Boeing, which has acted as a proxy for trade war tensions with China as it is the single largest US exporter to the country, fell 0.9 per cent as the biggest drag on the Dow. Construction equipment maker Caterpillar declined 0.9 per cent.

Chipmakers, which rely on China for a large portion of their revenue, also lost ground. The PHLX semiconductor index lost 0.99 per cent, its worst daily performance in a month. Intel, off 3.4 per cent, was the biggest drag on the S&P 500 and Nasdaq on tariff concerns and a downgrade by Northland Securities.

The Australian share market yesterday forged a tiny gain despite trade fears and lower commodity prices weighing upon mining and energy stocks.

The benchmark S&P/ASX200 closed up 0.17 per cent, at 6104.1 points, while the broader All Ordinaries index rose 0.12 per cent to 6212.8 points, supported by strength among the big four banks.

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Out today: RBA releases the minutes of its June policy meeting; ABS statistics for March quarter capital city property price indexes; the ANZ-Roy Morgan Consumer Confidence weekly survey.

Asia

Japanese stocks fell as the escalating trade dispute between the US and China stoked concerns about the impact on global demand, triggering a sell-off in stocks such as makers of construction equipment.

Also denting sentiment was a magnitude 6.1 earthquake in Osaka in western Japan on Monday, hitting the shares of utility companies headquartered in the Kansai region.

Kansai Electric fell 1.9 per cent though it said no irregularities had been detected at the Mihama, Takahama and Ohi nuclear plants after the quake. Osaka Gas stumbled 3.4 per cent.

On the other hand, contractors based in the Kansai region soared on speculation that construction demand will rise after the earthquake.

Asanuma Corp rose 1.3 per cent, Mori-gumi 1.6 per cent and Okumura Corp rose 0.1 per cent.

The Nikkei share average dropped 0.75 per cent to 22,680.33, after falling to as low as 22,601.13, the lowest point since June 6.

Hong Kong and China’s markets were closed.

Europe

Britain’s top stock index dipped on Monday as trade tensions between the US and China kept the pressure on equity markets across Europe, weighing on multinational companies.

The FTSE 100 fell 0.03 per cent to 7631.33, its lowest since May 30 but substantially outperformed other European stock markets.

Germany’s DAX - home to big autos stocks on the trade dispute’s front line - sank 1.36 per cent to 12,834.11, while the STOXX 600 fell 0.8 per cent.

Strong energy stocks underpinned the FTSE 100, while a weaker pound also boosted the index's mainly exporting companies.

The pan-European FTSEurofirst 300 index lost 0.80 per cent and MSCI’s gauge of stocks across the globe shed 0.51 per cent.

On top of trade, a potentially destabilising spilt in German Chancellor Angela Merkel’s governing coalition over a migration plan weighed on the euro and put further pressure on European shares.

North America

The Dow and S&P have fallen modestly, ending well off session lows, as gains in energy shares helped curb declines stemming from trade war concerns after China's retaliation to US tariffs.

US president Donald Trump last week said he was pushing ahead with tariffs on $US50 billion of Chinese imports, prompting a quick response from Beijing, which said it would put duties on several American commodities.

The Dow Jones Industrial Average fell 103.01 points, or 0.41 per cent, to 24,987.47, the S&P 500 lost 5.79 points, or 0.21 per cent, to 2773.87 and the Nasdaq Composite added 0.65 points, or 0.01 per cent, to 7747.03.

 

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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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