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Global Market Report - June 21, 2018

Lex Hall  |  21 Jun 2018Text size  Decrease  Increase  |  
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Australia

Another record high in US tech stocks is expected to help push the Australian share market higher this morning despite a sell-off spurred by the US-China trade skirmish.

At 8.30am the Australian futures index was up 11 points,or 0.18 per cent, to 6136. The Australian dollar is buying 73.69 US cents. 

The Australian share market yesterday hit its highest level in more than 10 years as the major banks soared, while Telstra plunged after announcing major job cuts and asset sales.

Telstra may still feel the impact of its plan to axe 8000 jobs and sell assets, which yesterday sent its shares tumbling 4.8 per cent to a seven- year low of $2.77.

APN Outdoor shares will be under scrutiny after France-based outdoor advertising giant JCDecaux made a $1.1 billion offer for the local company after the close of trading last night.

The benchmark S&P/ASX200 index gained 1.16 per cent to 6172.6 points, its highest level since January 2008, while the broader All Ordinaries index added 1.06 per cent to 6274.6 points.

Asia

Japan's Nikkei share average rose in volatile trade on Wednesday, helped by late short-covering following an earlier selloff and a broader recovery in regional sentiment as Chinese shares recovered from a rout in the previous session.

Like other markets, Tokyo-listed stocks were knocked heavily on Tuesday as the US-China trade escalated, with Japanese firms reliant on Chinese demand hit particularly hard.

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The Nikkei ended 1.24 per cent higher at 22,555.43 after dipping into negative territory earlier in the day, while the broader Topix advanced 0.5 per cent to 1752.75.

Hong Kong stocks tracked Asian shares to end higher, rebounding after the previous session's rout, as the surge in ZTE Corp helped soothe immediate panic over a Sino-US trade war.

The Hang Seng index ended 0.77 per cent higher at 29,696.17, while the China Enterprises Index closed 0.1 per cent higher at 11,505.74 points.

China stocks reclaimed some of the heavy losses from the previous session's plunge, as upbeat comments from state media and a burst of share purchase plans by listed companies soothed immediate panic over a Sino-US trade war.

However, investors remain wary about the longer-term sustainability of the rebound with Shanghai stocks up only 0.3 per cent, compared with Tuesday's nearly 4 per cent tumble, as some fear trade frictions could hurt China's already fragile economy.

The Shanghai Composite Index, which tumbled to a two-year low on Tuesday, gained 0.27 per cent to 2916.17 points. The blue-chip CSI300 index rose 0.40 per cent, to 3635.44 points.

Europe

Britain's top share index rose on Wednesday amid a broad-based rebound in Europe as immediate worries over the impact of a trade spat eased, but housebuilder Berkeley slumped after a profit warning.

The FTSE 100 climbed 0.31 per cent, to close at 7627.40, following three straight sessions of losses, while the domestically focused FTSE 250 gained 0.4 per cent.

The FTSE opened 1 per cent higher, but gains in sterling put pressure on it later in the day. The pound jumped after Prime Minister Theresa May won a crucial Brexit vote in parliament.

European shares have also climbed but the modest rebound failed to erase the previous session's losses as investors' trade fears lingered.

The pan-European STOXX 600 edged up 0.3 per cent, while Germany's trade-sensitive DAX managed only a 0.14 per cent gain to close at 12,695.16.

North America

The Nasdaq has closed at another record high, lifted by a climb in large-cap tech and consumer discretionary names, while the Dow and S&P 500 have been hemmed in as trade concerns simmer.

Twenty-First Century Fox Inc climbed 7.5 per cent after Walt Disney Co, up 1 per cent, sweetened its offer for some of the company’s assets to $US71.3 billion, looking to topple Comcast Corp’s bid, up 1.8 per cent.

The S&P 500 snapped a three-session losing streak, as gains in media stocks helped send the consumer discretionary sector up 0.5 per cent.

Names such as Facebook Inc up 2.3 per cent, part of the so-called "FAANG" group, also rose. Alphabet advanced 0.5 per cent and Amazon.com Inc rose 0.9 per cent.

Shares in those companies have been relatively unaffected by trade worries, with four of the five names hitting intraday records on Wednesday. The S&P tech sector was 0.3 per cent higher.

The Dow Jones Industrial Average fell 0.17 per cent, to 24,657.8, the S&P 500 gained 0.17 per cent, to 2767.32 and the Nasdaq Composite added 0.72 per cent, to 7781.52.

 

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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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