Australia

A choppy overnight session on Wall Street looks set to nudge Australian shares lower at the open, with the major US indexes fluctuating amid the increasing likelihood of further rate hikes.

The SPI200 futures contract was down 25 points, or 0.42 per cent, to 5902.0 at 8am Sydney time on Thursday, pointing to a dip at the open for the ASX, which closed more than 1 per cent higher for the first time in four months on Wednesday, buoyed by banking stocks.

But the Australian dollar again met resistance around the 71.50 US cents mark on Wednesday, and by Thursday morning had dropped to 71.09 US cents, down from 71.35 US cents at Wednesday's close.

In overnight trade, Wall Street's three major indexes edged slightly lower, with the S&P 500 zigzagging between positive and negative territory after the Fed's minutes showed broad agreement on the need to raise borrowing costs further despite sharp criticism from US
President Donald Trump over interest rate hikes.

The Dow Jones Industrial Average fell 91.74 points, or 0.36 per cent, to 25,706.68, the S&P 500 lost 0.71 points, or 0.03 per cent, to 2809.21 and the Nasdaq Composite dropped 2.7867 points, or 0.04 per cent, to 7642.70.

Copper and iron ore prices have jumped but the oil price has dipped, after US crude stockpiles rose 6.5 million barrels, almost triple what analysts had forecast, while exports dropped.

The gold price is also down on a stronger US dollar.

Woodside Petroleum is today expected to release its third quarter production report, while Treasury Wines Estate will hold its annual general meeting in Melbourne.

The Australian Bureau of Statistics will detail labour force data for September.

Asia

Stocks in Hong Kong ended higher on Tuesday, gaining a footing after recent losses, although data showing cooling factory-gate inflation in China for a third straight month in September and a warning from S&P on government debt curbed further gains.

The Hang Seng index ended 0.1 per cent higher at 25,462.26 points, while the China Enterprises Index closed 0.5 per cent higher at 10,198.33 points.

China's factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand, pointing to more pressure on the world's second-biggest economy as it remains locked in an intensifying trade war with the US.

Adding to worries was an S&P Global Ratings report that said off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan ($US5.78 trillion) and amount to "a debt iceberg with titanic credit risks".

Japan's Nikkei share average rose on Wednesday, continuing its recovery from last week's sharp downturn.

The Nikkei ended the day up 1.3 per cent at 22,841.12 after touching 22,959.41, its highest since October 11. The index rose for the second straight day following Monday's descent to a five-week low.

Europe

In Europe, shares fell across the board. The Stoxx Europe 600 Index dipped 0.4 percent. In London, the FTSE was down down -0.1 per cent. While in Paris the CAC fell -0.5 per cent, as did the DAX in Germany.

MSCI's global equity index touched a one-week high. The 47-country benchmark rose a quarter per cent after enjoying its biggest one-day gain since mid-2016 on Tuesday, with a rise of 1.7 per cent.

The more cheerful mood also favoured emerging-market currencies and took some steam out of the safe-haven yen. The latest investor survey by BofA Merrill Lynch found fund managers now considered emerging-market currencies the most undervalued ever against the US dollar.

Turkey's lira is trading just off 2 1/2-month highs, having rallied 10 per cent over the past week as the release of an imprisoned US pastor fuelled hopes of a rapprochement with Washington.

Ankara said investors had put in $US6 billion in bids for $US2 billion of bonds it sold on Tuesday, though it had to pay a substantial new-issue premium.

North America

Wall Street's major indexes have edged lower in a choppy session after the US Federal Reserve showed broad agreement on the need to raise borrowing costs further, cementing investor concerns that had cause a major sell-off the week before.

The S&P 500 zigzagged furiously between positive and negative territory after the release of the Fed's September meeting minutes.

In defiance of sharp criticism from US President Donald Trump, policymakers showed agreement on the September hike and general anticipation that further gradual increases would be consistent with the economic expansion, labour market strength, and firm inflation that most forecast.

The S&P has only partially recovered ground lost last week, when it marked its biggest decline since March as investors worried about rate hikes.

Even before the minutes, trading was already choppy, and the S&P 500 struggled to build on the previous day's rally after disappointing housing data dragged down stocks such as Home Depot and homebuilders.

Of the S&P's 11 major sectors, only four ended the day with gains. Financials was the biggest gainer, closing 0.9 per cent higher. Materials was the biggest loser, with an 0.8 per cent drop.

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Morningstar with AAP, Reuters 

Lex Hall is content editor, Morningstar Australia

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