Global Market Report - May 9, 2018
The local share market is expected to open flat after the major US stock indexes erased earlier losses to end the session little changed, while markets priced in Donald Trump’s decision to withdraw from the Iran nuclear deal.
Australia
The local share market is expected to open flat after the major US stock indexes erased earlier losses to end the session little changed, while markets priced in Donald Trump’s decision to withdraw from the Iran nuclear deal.
At 7am (AEST) on Wednesday, the Australian share price futures index was up five points, or 0.08 per cent, at 6082 points.
In the US, energy stocks cut earlier losses after Trump said the US would quit the Iran nuclear deal, confirming what many investors had expected.The Australian share market yesterday closed slightly higher ahead of the federal budget and the Iran decision.
The benchmark S&P/ASX200 was up 7.4 points, or 0.12 per cent, at 6091.9 points, while the broader All Ordinaries index was up 7.6 points, or 0.12 per cent, higher at 6183.2 points.
At 8.25am (AEST) on Wednesday, the local currency was worth US74.52c, down from US75.10c on Tuesday.
Out today: fertiliser and explosives maker Incitec Pivot releases its half-year results. Building products supplier CSR releases full-year result.
Asia
Asian shares are higher, helped by tech stocks as generally upbeat earnings overcame weakness in the global smartphone market and concerns about more regulation.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6 per cent, with information technology shares rising 1.3 per cent. Japan’s Nikkei was 0.2 per cent higher.
Some analysts warn the tech rally could face a short-term correction as valuations soar.
Europe
Dealmaking dominated activity in UK stocks, with gains in Shire and Virgin Money, although the FTSE 100 index held steady after a public holiday and ended flat at 7565.75 points.
A weaker pound had encouraged some earlier gains in the blue chip index, while mid caps closed 0.9 per cent higher and analysts at Accendo Markets said the market would remain supported by sterling’s relative weakness to the dollar.
Meanwhile, M&A activity prompted sizeable moves among individual stocks, with Shire the top FTSE gainer, up 4.6 per cent at 4034.50 pence, after Japan’s Takeda agreed on Tuesday to buy the rare disease specialist for £45.3 billion pounds, raising the amount of cash in its bid to secure a recommendation.
Shire traded below the agreed 4817 pence price, reflecting that the deal would only be completed next year, traders said.
North America
Wall Street cut its losses to end little changed on Tuesday while energy stocks rallied after US President Donald Trump said the US would quit the Iran nuclear deal, confirming what many investors had expected.
Trump said the US would withdraw from a 2015 international agreement designed to deny Tehran the ability to build nuclear weapons, and also reinstate sanctions on Iran.
The S&P energy sector erased earlier losses to end the day up 0.78 per cent as oil prices reduced earlier declines on bets that the sanctions would disrupt global crude supplies.
The decision to leave the agreement with Iran is likely to raise the risk of conflict in the Middle East, upset America’s European allies and disrupt global oil supplies. Trump said he was willing to negotiate a new deal with Iran.
The Dow closed 2.89 points, or 0.01 per cent higher at 24,360.21, while the S&P 500 was down 0.71 points, or 0.03 per cent, at 2671.92. The Nasdaq Composite added 1.69 points, or 0.02 per cent, to 7266.90.
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Lex Hall is a Morningstar content editor, based in Sydney.
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