Global Market Report - 20 February
Australian shares are expected to open higher after a positive lead from Wall Street overnight.
Australia
Australian shares are expected to open higher after a positive lead from Wall Street overnight.
At 7am Sydney time the SPI200 futures contract was up 16 points, or 0.26 per cent, at 6081.0, suggesting a positive start for the benchmark S&P/ASX200.
Yesterday, Australia's big four banks propped up the Australian sharemarket after a day of generally disappointing earnings results.
The benchmark S&P/ASX200 index closed up 17.1 points, or 0.28 per cent, at 6106.9 points at 4.15pm on Tuesday, while the broader All Ordinaries was up 13.5 points, or 0.35 per cent, at 6,184.2.
On Wall Street, the Dow Jones Industrial Average was up 0.03 per cent, the S&P 500 was up 0.15 per cent and the Nasdaq Composite was up 0.19 per cent.
The Aussie dollar surged overnight and is buying US71.70 cents, from US71.12 cents yesterday.
A2 Milk has posted a 55 per cent rise in net profit to $NZ152.7 million as it hailed strong sales growth in all key products.
Woolworths has lifted first-half profit 1 per cent to $979 million, compared to 3 per cent rise of rival Coles.
After market close yesterday, BHP reported a drop in first-half 2019 profit as a decline in copper earnings and a series of output disruptions boosted costs and resulted in missed opportunities for cost savings.
ASIA
Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.10 per cent and the Shanghai Composite rose 0.05 per cent.
Guangzhou Pearl River Industrial Development and Guangzhou Port both rose by 10 per cent after Beijing unveiled a long-heralded plan to create the Greater Bay Area by linking Hong Kong and Macau with cities in Guangdong, the South China Morning Post reported.
The Hang Seng lost 0.42 per cent. HSBC fell 2.3 per cent after its fourth-quarter results fell short of analyst expectations.
EUROPE
European markets finished mixed as of the most recent closing prices. The DAX gained 0.09 per cent, while the FTSE 100 led the CAC 40 lower. They fell 0.56 per cent and 0.16 per cent respectively.
Stocks hovered around their highest level in four months on Monday as hopes of progress in US-China trade talks kept sentiment afloat while Wall Street was closed for a bank holiday.
The STOXX 600 closed up 0.2 percent, steadying at its highest level since 10 October.
French car parts maker Faurecia climbed 1.3 per cent after saying it hoped to outperform the market this year and reported margin expansion, though it warned of negative auto production growth in general.
Faurecia’s gain bucked the trend in the autos sector which fell 0.3 per cent, lagging the market after data showed car sales in China fell for a seventh straight month.
Investors in the auto sector were also on tenterhooks after the US Commerce Department sent its report on national security and car imports to President Trump, setting the stage for possible tariffs.
Leading the market, Wirecard shares jumped 15.2 per cent after German market regulator BaFin banned the establishment or increase of short positions in the stock.
UK-listed consumer goods firm Reckitt Benckiser also provided a big boost to the market, up 4.6 percent after reporting higher-than-expected Q4 sales growth, helped by improvements in both its health and home and hygiene businesses.
Chipmaker AMS rose 3.5 percent after an article by Barron's saying the company is trying to diversify away from the slowing iPhone segment into other consumer areas and industrial applications.
The bank index inched up 0.4 per cent, having risen sharply on Friday after European Central Bank board member Benoit Coeure said a new round of cheap multi-year loans to banks was possible.
NORTH AMERICA
US stocks gained ground on Tuesday as upbeat results from Walmart boosted investor sentiment and high-level US-China trade talks resumed in Washington.
All three major US equity indexes closed higher, with the Nasdaq ending its seventh consecutive day in the black.
Stocks pared their gains late in the session, however, after a Reuters story quoted New York Fed President John Williams saying a different economic outlook would be necessary for the US Federal Reserve to resume its interest rate hikes.
Consumer discretionary stocks, led by Amazon.com, provided the biggest lift to the S&P 500 and Nasdaq, while Walmart Inc headed up the blue-chip Dow's advance.
Walmart reported a better-than-expected jump in same-store sales during the holiday quarter, sending shares of the world’s largest retailer up 2.2 per cent.
A fresh round of high-level trade talks between the US and China began in Washington, with US Chamber of Commerce vice president Myron Brilliant expressing hope that “the two sides will reach a comprehensive, bold and significant trade agreement.”
On Wednesday, the Federal Open Market Committee is slated to release minutes from its January policymaking meeting. The minutes are expected to reaffirm the central bank's statement last month that it would be "patient" with respect to further rate hikes after markets swooned late in December on fears of an economic slowdown.
Indeed, in the quarters ahead, analysts see a slowdown in corporate profit growth. While fourth-quarter profits are expected to have increased by 16.3 percent, the outlook going forward grows cloudier.
First-quarter 2019 earnings are now seen dropping by 0.6 per cent from last year, which would mark the first annual decline since the earnings recession that ended mid-2016.
The Dow Jones Industrial Average rose 8.07 points, or 0.03 per cent, to 25,891.32, the S&P 500 gained 4.16 points, or 0.15 per cent, to 2,779.76 and the Nasdaq Composite added 14.36 points, or 0.19 per cent, to 7,486.77.
Of the 11 major sectors in the S&P 500, all but healthcare and industrials closed in positive territory.
Amazon ended the session up 1.2 per cent, bouncing back from a two-day sell-off following news that the e-commerce giant’s China unit is in merger talks with Chinese shopping site Kaola.
Shares of Freeport McMoRan jumped 6.6 per cent after Citigroup raised the stock to "buy" from "neutral".