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Global Market Report - June 26, 2018

Lex Hall  |  26 Jun 2018Text size  Decrease  Increase  |  
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Australia

Escalating fears of a trade war between the US and other leading economies have rocked global sentiment and set the Australian share market on course for a sharp fall.

At 8.30am (AEST), the Australian futures index was down 56 at 6099. The Australian dollar has edged down, buying 74.14 US cents.

Global equity markets have taken a battering: London's FTSE 100 was down 2.2 per cent, Germany's DAX fell 2.5 per cent and China’s markets lost more than one per cent.

Losses were widespread but technology stocks suffered the most as the US Treasury Department was drafting curbs that would block firms with at least 25 per cent Chinese ownership from buying US tech firms, a government official said on Sunday.

The Australian equities market on Monday lost ground after losses in the finance sector following Commonwealth Bank's announcement it will spin off its wealth management business.

The benchmark S&P/ASX200 index closed down 0.24 per cent at 6210.4 points, while the broader All Ordinaries fell 0.21 per cent to 6308.7 points.

Out today: Reserve Bank of Australia head of payments policy Tony Richards will address an Australian Business Economists function on cryptocurrencies in Sydney.

The ANZ-Roy Morgan Consumer Confidence weekly survey is due out.

Asia

In Asia, Japan's Nikkei share average dropped as sellers targeted large caps including Fast Retailing and SoftBank as well as defensive stocks, while the mining sector outperformed after oil prices jumped on Friday.

Sharp Corp stumbled 5.1 per cent after the company said it will issue 78.4 million shares via a public offering.

The Nikkei fell 0.8 per cent to 22,338.15.

Hong Kong stocks fell to a six-month low, dragged down by tech shares due to the US plans to limit on Chinese investment in US technology firms.

The Hang Seng index fell 1.3 per cent, to 28,961.39, while the China Enterprises Index lost 1.2 per cent, to 11,208.90.

China stocks gave up early gains to close lower, as an expected reserve requirement ratio (RRR) cut was largely offset by lingering trade war fears, and as a weakening yuan pushed lower real estate and airline shares.

The blue-chip CSI300 index fell 1.3 per cent to 3,560.48, while the Shanghai Composite Index slid 1.1 per cent to 2859.34.

Europe

British shares suffered their worst trading day since February as a global sell-off caused by the escalating trade dispute.

The FTSE 100 closed down 2.2 per cent, with financials, energy and material stocks weighing on the British blue chip index.

Losses accelerated across Europe after trading began on Wall Street and Donald Trump announced plans to bar Chinese companies from investing in US technology firms and block additional technology exports.

Cruise operator Carnival's shares took the biggest hit, down 11.1 per cent as it cut its earnings forecast.

Heavyweights BP and Royal Dutch Shell were down 3.4 per cent and 2.6 per cent as oil prices gave back Friday's gains made after an output agreement between major oil exporters.

The pan-European STOXX 600 index dropped 2 per cent, while Frankfurt's DAX lost 2.5 per cent to 12,270.33.

North America

Trade fears have battered US stocks, driving benchmark indexes lower by about 2 per cent to their steepest losses in more than two months.

Losses were widespread but technology stocks suffered the most, with the Nasdaq diving 2.5 per cent, as the US Treasury Department was drafting curbs that would block firms with at least 25 per cent Chinese ownership from buying US tech firms, a government official said on Sunday.

US Treasury Secretary Steven Mnuchin on Monday tweeted that the restrictions would apply not specifically to China but "to all countries that are trying to steal our technology".

The S&P technology index dropped 3.0 per cent, set for its biggest one-day plunge in nearly three months. The Philadelphia Semiconductor index dropped 3.7 per cent as shares of chipmakers, which derive much of their revenue from China, took a hit.

Harley-Davidson Inc shares tumbled 7.1 per cent after the company said it would move production of motorcycles shipped to the EU to its international facilities. It forecast that tariffs would cost the company $90 million to $100 million a year.

The Dow Jones Industrial Average fell 1.33 per cent, to 24,252.80, the S&P 500 lost 1.37 per cent, to 2717.07 and the Nasdaq Composite dropped 2.09 per cent, to 7532.01.

 

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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

© 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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