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Global Market Report - May 2, 2018

Lex Hall  |  02 May 2018Text size  Decrease  Increase  |  
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The Australian share market is expected to open slightly higher after a mixed performance on Wall Street and a four-week fall in copper prices because of fears of waning Chinese demand.

At 8am (AEST) on Wednesday, the Australian share price futures index was up seven points, or 0.12 per cent, at 6000 points.

Benchmark copper on the London Metal Exchange ended down 0.9 per cent at $US6,745 a tonne from an earlier $US6,710, its lowest since April 4. Chinese demand for industrial metals typically picks up in the second quarter ahead of construction activity over the summer months.

The Australian dollar has fallen below the US75c mark, amid a surge in the US dollar and fading prospects for a local rate hike.

The S&P/ASX200 index ended Tuesday up 32.5 points, or 0.54 per cent, at 6015.2 points, while the broader All Ordinaries index was up 28.4 points, or 0.47 per cent, at 6100.0 points.

The financial sector posted its biggest single-day gain since the financial services royal commission was announced in November and banks have now recovered from the heavy falls suffered in the wake of a critical UBS report on Westpac's mortgage book last Thursday.

ANZ shares rose 63c, or 2.4 per cent, to $27.47 after reporting a 16 per cent fall in first-half profit to $2.88 billion in a result largely in line with expectations.

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Commonwealth Bank also rose strongly despite a damning report into the bank’s culture, which found Australia’s biggest lender was complacent, insular and ignored risks while business was profitable. CBA shares closed $1.35, or 1.9 per cent, higher at $73.17 while National Australia Bank lifted 1.7 per cent, to $29.45 and Westpac shares were 1.4 per cent higher at $29.05.

The RBA left the official cash rate at 1.5 per cent for the 21st consecutive month, saying weak household spending and sluggish wages growth remain a concern for the economy.

Rio Tinto will today hold its annual general meeting, Woolworths issues its 3Q sales update, and Qantas is also releasing a 3Q trading update.


Asian share were mixed after the US postponed the imposition of steel and aluminium tariffs on Canada, the EU and Mexico, and offered permanent exemptions for several other allies.

Japan’s Nikkei rose 0.2 per cent while MSCI’s US dollar-denominated index of Asia-Pacific shares outside Japan was down 0.1 per cent though only Australia and New Zealand are open.


British shares traded higher on Monday as the planned merger between Sainsbury’s and Asda, the UK arm of Walmart, sent shockwaves through British retail stocks as investors sought to adjust to a potentially game-changing overhaul of the industry.

Britain’s FTSE was up 0.15 per cent at 7520.36 points but all eyes were on Sainsbury’s shares, which surged up to 20 per cent and were set for their highest ever rise.

North America

The S&P 500 edged higher on optimism that the North American Free Trade Agreement could be renegotiated, following comments from US and Mexico government officials.

Apple has turned in another quarterly beat, with revenue up 16 per cent to $US61.1bn and earnings per share up 30 per cent — and announced a $US100bn share buyback program.

The Dow Jones Industrial Average fell 64.10 points, or 0.27 per cent, to 24,099.05, the S&P 500 was up 6.75 points, or 0.25 per cent, to 2654.80 and the Nasdaq Composite added 64.44 points, or 0.91 per cent, to 7130.70.

Earlier on Tuesday, US Commerce Secretary Wilbur Ross said the Trump administration was prepared to levy tariffs on China if an American delegation heading to Beijing did not reach a settlement on trade imbalances.

The Federal Reserve on Tuesday began a periodic two-day monetary policy meeting with markets eager for clues to how aggressively the central bank plans to raise interest rates this year.

is senior editor for Morningstar Australia

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