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Global Market Report - May 30, 2018

Lex Hall  |  30 May 2018Text size  Decrease  Increase  |  
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Australia

The local share market is set to plunge as US stocks fell the most in more than a month fuelled by political turmoil in Italy, which has stoked fears of further instability in the eurozone.
At 8.30am (AEST), the Australian share price futures index was down 45 points or 0.75 per cent at 5968 points. The Australian dollar is buying 75.06 US cents.
In the US, the Dow Jones index and the S&P 500 both fell more than 1 per cent, amid fears Italy has been unable to assemble a coalition government after its elections in March, which may result in another round of elections. The Australian sharemarket on Tuesday closed modestly higher as gains by the big banks, healthcare companies and miners offset weaknesses in other sectors. The benchmark S&P/ASX200 closed up 9.6 points, or 0.16 per cent, at 6013.6 points, while the broader All Ordinaries index was up 8.1 points, or 0.13 per cent, at 6121.7 points.
Out today: the ABS releases building approvals figures for April.

Asia

Asian shares fell on Tuesday and the euro struggled near 6½-month lows as early elections loomed in Italy, although a revival in diplomatic talks with North Korea and a retreat in oil prices supported sentiment.
All that hit risk appetite, sending MSCI's broadest index of Asia-Pacific shares outside Japan down 0.4 per cent after three consecutive sessions of gains.
E-Mini futures for the S&P500 also gave up early gains.
Japan's Nikkei skidded 0.55 per cent. Chinese shares were in the red, too, with the Shanghai Composite down 0.47 per cent and Hong Kong's Hang Seng index off 1 per cent.

Europe

British stocks fell on Tuesday, joining a Europe-wide sell-off triggered by worries over a political crisis in Italy, while a profit warning at Dixons Carphone wiped one fifth off the retailer's market value.
The UK's top share FTSE 100 index ended the session with a 1.3 per cent loss, hitting its lowest level in three weeks. The blue chip benchmark shrugged off a fall in the pound as it resumed trading after a long holiday weekend. The FTSE 250 midcap index fell 1.7 per cent.
The DAX 30 index in German was down 1.53 per cent, and France's CAC 40 index fell 1.29 per cent.

North America

The political crisis in Rome, and the threat to the euro project it represents, triggered a rush to traditional safe havens like US debt, pulling down US 10-year bond yields and in turn spurring losses for US banks.
The market's main measure of short-term volatility, the CBOE Volatility index, spiked to its highest level since April 25.
At the close of trade, the Dow Jones Industrial Average was down 391.64 points, or 1.58 per cent, to 24,361.45, the S&P 500 lost 31.47 points, or 1.16 per cent, to 2689.86 and the Nasdaq Composite dropped 37.26 points, or 0.5 per cent, to 7396.59.
Shares of large US banks were also pressured by downbeat guidance from JPMorgan Chase & Co and Morgan Stanley. JPMorgan's corporate and investment bank chief said his bank's second-quarter markets revenue would be flat compared with a year earlier.
Investor George Soros warns a surging dollar and a capital flight from emerging markets may lead to another "major" financial crisis.

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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 content editor for Morningstar Australia

© 2020 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. The article is current as at date of publication.

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