Global Market Report - 11 February
Australian shares are expected to open flat after a mixed session on Wall Street on Friday.
Australia
Australian shares are expected to open flat after a mixed session on Wall Street on Friday.
The SPI200 futures contract was down 4 points, or 0.07 per cent, at 6,007.0 at 8am Sydney time, suggesting a slight dip is in store for the benchmark S&P/ASX200 on Monday. On Friday, Australian shares finished the week on a down note, with energy and mining sectors dragging the local bourse.
The benchmark S&P/ASX200 index closed down 21 points, or 0.34 per cent, at 6,071.5 points at 4.15pm on Friday, while the broader All Ordinaries was down 22.9 points, or 0.37 per cent, at 6136.2.
Results on Wall Street were mixed on Friday, with the Dow Jones Industrial Average down 0.25 per cent, the S&P 500 up 0.07 per cent and the Nasdaq Composite down 0.14 per cent.
Traders are expecting earnings results for several companies during the week, including Amcor, Bendigo Bank, JB Hi-Fi and real estate investors GPT on Monday.
The Aussie dollar is buying 70.88 US cents from 70.85 US cents on Friday.
Scott Morrison will launch the second arm of his re-election pitch on Monday by claiming superior national security credentials, while Labor wrestles internally over whether to support a bill by independents allowing the transfer of asylum seekers to Australia for medical treatment.
ASIA
Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 1.30 per cent, while the Nikkei 225 led the Hang Seng lower. They fell 2.01 per cent and 0.16 per cent respectively.
US negotiators are preparing to press China next week on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.
A new round of trade talks begins in Beijing on Monday, after the most recent set of negotiations concluded in Washington last week without a deal and with the top U.S. negotiator declaring that a lot more work needed to be done.
The lock-up period for shares held by cornerstone investors in China Tower, the world's largest telecoms tower operator, expired on Friday. The Beijing-based company listed in Hong Kong for HK$54.3 billion (US$6.9 billion) in August, making it the city’s largest IPO in 2018, the South China Morning Post reports.
EUROPE
European markets finished broadly lower on Friday with shares in Germany leading the region. The DAX is down 1.05 per cent while France's CAC 40 is off 0.48 per cent and London's FTSE 100 is lower by 0.32 per cent.
Downgrades to growth forecasts weighed and bleak numbers from Umicore, Skanska, and Rockwool outweighed a sales beat at L’Oreal, which rose 1.2 per cent.
Markets were hit on Thursday by US President Donald Trump saying he did not plan to meet Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
Growth worries in Europe also spiked after the European Commission downgraded its growth forecasts.
Autos fell 0.3 per cent, extending losses from Thursday when the sector suffered its biggest one-day drop since the Brexit vote aftermath in June 2016.
NORTH AMERICA
The benchmark S&P 500 index and the Nasdaq edged upward to snap a two-day losing streak on Friday as positive corporate results offset lingering scepticism over the US and China reaching a trade deal before the March 1 deadline.
Shares of Coty, Mattel and Motorola Solutions jumped after the companies reported better-than-expected quarterly results.
In addition, shares of Electronic Arts, which plunged on Wednesday after the company's quarterly results, surged after the videogame publisher said that its game Apex Legends had attracted 10 million players in three days.
Electronic Arts and Motorola Solutions were among the top boosts to the S&P 500.
Earlier, US stocks dragged as trade concerns continued to weigh on investor sentiment. President Donald Trump said on Thursday he did not plan to meet Chinese President Xi Jinping before the deadline set for reaching an agreement.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for principal-level meetings on 14-15 February, a statement from the White House said.
As the session wore on, Wall Street's major indexes regained lost ground.
The Dow Jones Industrial Average fell 63.2 points, or 0.25 per cent, to 25,106.33, the S&P 500 gained 1.83 points, or 0.07 per cent, to 2707.88 and the Nasdaq Composite added 9.85 points, or 0.14 per cent, to 7298.20.
For the week, the Dow added 0.17 per cent, the S&P 500 rose 0.07 per cent, and the Nasdaq gained 0.47 per cent.
The S&P 500 has risen more than 15 per cent from 20-month lows in December, spurred by a dovish Federal Reserve and largely positive fourth-quarter earnings, as well as hopes for an eventual US-China trade deal.
Of the S&P 500 companies that have reported quarterly results, 71.5 per cent have beaten profit estimates, according to IBES data from Refinitiv.
However, analysts now expect current-quarter profit to dip 0.1 per cent from the year before, not grow the 5.3 per cent estimated at the start of the year.