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Global Market Report - May 3, 2018

Lex Hall  |  03 May 2018Text size  Decrease  Increase  |  
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Australia

The Australian share market is expected to open flat, after gains in base metals prices were offset by a weak lead from US stocks and a decision by the Federal Reserve to leave interest rates unchanged.

At 7.45am (AEST), the Australian share price futures index was up four points, or 0.07 per cent, at 6050 points.

On commodities markets, copper and nickel prices bounced off their multi-week lows as Chinese steel prices soared and a private survey showed growth in China’s manufacturing sector unexpectedly picked up in April.

The Australian share market yesterday posted its fourth straight day of gains, taking the major stock indexes to their highest level in two months. The benchmark S&P/ASX200 was up 35 points, or 0.58 per cent, at 6050.2 points, while, the broader All Ordinaries index was up 36.7 points, or 0.6 per cent, at 6136.7 points.

The Australian dollar has followed Wall Street lower after the US Federal Reserve indicated that it is on track to raise its interest rate at its next policy meeting in June.

At 8.45am (AEST), the local currency was worth US74.91c, down from US75.11c yesterday.

Out today: ABS building approvals figures for March, and international trade data, also for March.NAB half-year results; QBE Insurance and Santos hold their annual general meetings.

Asia

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Asian equities eased on Wednesday, while the dollar traded near a four-month high as investors await the Federal Reserve’s upcoming policy statement for clues on the future pace of US monetary tightening.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, while Japan's Nikkei shed 0.2 per cent.

Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore, said that in addition to focusing on the Fed’s policy statement equity investors may be turning cautious on the outlook for corporate profits, given potential cost pressures from recent rises in oil prices.

Europe

British shares traded higher on Wednesday, posting a fifth session of gains in a row as metal prices boosted miners and first-quarter earnings reports lifted the London stock market.
The FTSE index ended the session up 0.3 per cent at 7543.20 points, its highest since the end of January, when sterling was, however, about four per cent higher than it is now against the US dollar.

The release of construction PMI data showed British construction activity rebounding faster than expected, pushing the pound slightly higher but with little effect on the FTSE.
Germany's DAX 30 was up 1.5 per cent, and France’s CAC40 rose 0.16 per cent.

Euro zone PPI March, CPI estimate; UK Markit/CIPS services PMI April

North America

Stocks briefly rose but returned to negative territory to close almost one per cent lower, after the Federal Reserve left interest rates unchanged, but kept the door open for a rate rise in June.

On commodities markets, copper and nickel prices bounced off their multi-week lows as Chinese steel prices soared and a private survey showed growth in China’s manufacturing sector unexpectedly picked up in April.

The Federal Open Market Committee unanimously decided to keep its lending rate in a target range of between 1.50 and 1.75 per cent. It expressed a confident economic outlook, saying activity had expanded at a moderate rate and that inflation was close to its two per cent target. The Fed is expected to increase rates in June.

Investors focused on the Fed’s description of its inflation target as “symmetric”, which they said signalled the Fed’s willingness to stick to its projected pace of interest rate increases even if the rate of inflation were to move slightly beyond two per cent.

The Dow fell 174.07 points, or 0.72 per cent, to close at 23,924.98, the S&P 500 lost 19.13 points, or 0.72 per cent, to 2635.67 and the Nasdaq Composite lost 29.81 points, or 0.42 per cent, to 7100.90.

Apple rose 5 per cent after it late Tuesday posted resilient iPhone sales in the face of waning global demand and promised $100 billion in additional stock buybacks.

Out today: US trade balance March, Markit services PMI April, ISM non-manufacturing April, Factory orders March, Durable goods orders March

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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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