Australia

Australian shares are poised to open higher today after a record high in US tech stocks and gains in consumer discretionary sectors overshadowed falls in banking shares and Treasury yields.

At 8.30am, ASX futures were up 10 points at 6000. The Australian dollar retreated 0.4 per cent and is buying 76.16 US cents.

The Australian share market yesterday suffered falls in the heavyweight energy and mining sectors caused by weaker commodity prices. The benchmark S&P/ASX200 index closed down 0.51 per cent, at 5994.9 points, while the broader All Ordinaries index closed down 0.49 per cent to 6108.5 points.

First quarter GDP results are out today and are expected to show growth has more than doubled to 0.9 per cent from the December quarter. The RBA yesterday left the cash rate unchanged at 1.5 per cent.

The World Bank says global economic growth will remain robust at 3.1 per cent in 2018 before slowing gradually over the next two years.

Asia

Asian stocks climbed on Tuesday. MSCI's Asia ex-Japan stock index was firmer by 0.09 per cent while Japan's Nikkei index closed up 0.28 per cent at 22,539.54.

Hong Kong shares rose slightly, with sentiment aided by a private survey showing China's services sector expanded at a steady pace in May, with companies accelerating hiring on the back of the strongest optimism for future growth in 11 months.

The Hang Seng index rose 0.3 per cent, to 31,093.45, while the China Enterprises Index gained 0.1 per cent, to 12,259.32 points.

China's blue-chip CSI300 index rose 0.99 per cent to 3845.32, while the Shanghai Composite Index ended up 0.7 per cent at 3114.21. China's growth is projected at 6.5 per cent this year, 6.3 per cent in 2019 and 6.2 per cent in 2020.

Europe

Royal Bank of Scotland weighed on Britain's FTSE 100 on Tuesday after the government took a loss selling a stake in the bank, while a rising pound after strong services data piled extra pressure on the internationally-exposed index.

The top share index closed down 0.7 per cent as strong data in the services sector pushed sterling higher and weighed on dollar earners.

Shares in RBS fell 5.1 per cent after the government sold 7.7 per cent of the lender for 2.5 billion pounds ($3.33 billion), realising a loss of $2.66 billion.

The drop in RBS shares dragged on the financials sector, the biggest weight on the FTSE. HSBC, Lloyds and Barclays fell between 1 and 3 per cent.

Cruise and travel company Carnival posted the worst performance and lost 6.2 per cent.
The FTSE100 lost 0.70 per cent.

Meanwhile, the pan-European FTSEurofirst 300 index lost 0.32 per cent.
Germany’s DAX bucked the trend, gaining 0.13 per cent to 12,787.13 points.

North America

The Nasdaq has closed at a record high for the second consecutive day with help from the technology and consumer discretionary sectors, while the S&P 500 edged higher as investors eyed solid US economic data.

However, bank stocks declined along with US Treasury yields, and investors appeared to favour bonds over defensive equity sectors such as utilities and consumer staples.

The US services sector activity accelerated in May, pointing to robust economic growth in the second quarter, although trade tariffs and a shortage of workers posed a threat to the outlook.

Investors were hoping for signs of political stability in Italy as the new, anti-establishment government won its first vote of confidence in the upper house Senate and the prime minister promised radical changes, including more generous welfare and a crackdown on immigration.

The Dow Jones Industrial Average fell 0.06 per cent, to 24,799.98, the S&P 500 gained 0.07 per cent, to 2748.8 and the Nasdaq Composite added 0.41 per cent, to 7637.86.

The Nasdaq's biggest boost was from Amazon.com, which rose 1.9 per cent, also leading gains in the S&P consumer discretionary index. Apple rose 0.8 per cent, contributing the biggest point gains to the technology index and the second biggest for the Nasdaq.

The World Bank predicts that US will register 2.7 per cent growth in 2018, aided by tax cuts, before slowing to 2.5 per cent next year and 2 per cent in 2020.

 

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Morningstar with AAP

Lex Hall is a Morningstar content editor, based in Sydney.

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