Global Market Report - 4 March
Australian shares are expected to open higher following a positive lead from overseas at the end of last week, and developing signs of a trade deal.
Australia
Australian shares are expected to open higher following a positive lead from overseas at the end of last week.
The SPI200 futures contract was up 18 points, or 0.29 per cent, at 6,210.0 at 8am Sydney time, suggesting a bounce for the benchmark S&P/ASX200 on Monday morning.
On Wall Street on Friday, the Dow Jones Industrial Average closed up 0.43 per cent, the S&P 500 was up 0.69 per cent and the Nasdaq Composite was up 0.83 per cent.
The Aussie dollar is buying 70.92 US cents, unchanged from Friday.
On Friday, the ASX finished higher for a third day, hitting its highest level in five months.
The benchmark S&P/ASX200 index closed up 23.7 points, or 0.38 per cent, at 6,192.7 points at 4.15pm on Friday, while the broader All Ordinaries was up 21.1 points, or 0.34 per cent, at 6,273.8.
The best performing ASX 100 stocks during February were IOOF Holdings (+35.9 per cent), Magellan Financial Group (+25pc) & Cleanaway Waste Management (+20.2pc). The worst performers were Cochlear (-11.8pc), Bank of Queensland (-11.4pc) and Coles Group (-9.4pc).
Among the Small Ordinaries, the best performers were BWX (+53.9pc), Automotive Holdings Group (+47.9pc) and Appen (+46.9pc). The worst performers were Blackmores (-27.7pc), Pact Group (-23.2pc) and Saracen Mineral (-23.1pc).
ASIA
Asian markets finished broadly higher on Friday with shares in China leading the region.
The Shanghai Composite is up 1.80 per cent while Hong Kong's Hang Seng is up 0.63 per cent.
In Japan, the Nikkei rose 1.0 per cent to 21,602.69, the highest close since 13 December. For the week, the benchmark index gained 0.8 per cent and posted its third straight weekly gain.
Exporters took advantage of a weaker yen after the US dollar rose 0.4 per cent to 111.73 yen, the highest level since 20 December.
EUROPE
European shares rose to five-month highs on Friday, starting the month on a strong footing, as a fresh batch of corporate updates fuelled risk appetite, even after US President Donald Trump raised some concerns over trade talks with China.
The pan-regional STOXX 600 index closed up 0.4 percent after hitting its highest since 8 October earlier in the session.
Gains spread across all regional bourses with Germany’s exporter-heavy DAX leading the charge thanks notably to rising car makers stocks.
The Dublin bourse was up 1.3 per cent, outperforming its European peers as worries that Britain will crash out of the European Union without a deal at the end of this month eased.
The market is often seen as a barometer for Brexit sentiment. The optimism on markets came despite mixed news from economic indicators.
Data showed eurozone manufacturing activity went into reverse for the first time in more than five years, but German retail sales jumped and the bloc’s powerhouse unemployment remained at record lows.
Still, the market pared some of its earlier gains in the afternoon after data showed February US manufacturing activity dropped to its lowest since November 2016.
Among individual moves, Italian luxury group Moncler stole the spotlight, rising 11.1 per cent for its best day since January 2014 after its 2018 results.
Moncler peer benefited from the rally with Gucci owner Kering up 3.2 per cent, LVMH up 1.5 per cent and Burberry rose 3.1 per cent.
Britain’s WPP, the world’s biggest advertising company, rose 4.9 per cent after its full-year results came as a relief amid fears the industry is facing structural headwinds.
NORTH AMERICA
The S&P 500 and the Dow Jones Industrial Average snapped a three-day run of losses on Friday as optimism about the prospects for a US-China trade agreement countered downbeat US and China manufacturing data.
The Nasdaq meanwhile marked its longest streak of weekly gains since late 1999.
Following President Donald Trump's announcement last weekend of a delay in higher tariffs on Chinese imports, Bloomberg reported late Thursday that a summit between Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen as soon as mid-March.
A private survey showed China's factory activity contracted for a third straight month in February, though at a slower pace, indicating a marginal improvement in domestic demand as a flurry of policy stimulus kicked in from late last year.
ISM data also showed US manufacturing activity for February dropped to its lowest since November 2016, and the University of Michigan survey showed consumer sentiment fell short of expectations in the month.
The Dow Jones Industrial Average rose 110.32 points, or 0.43 per cent, to 26,026.32, the S&P 500 gained 19.2 points, or 0.69 per cent, to 2,803.69 and the Nasdaq Composite added 62.82 points, or 0.83 per cent, to 7,595.35.
Friday marked the first close above 2,800 for the S&P since 8 November. Nate Thooft, global head of asset allocation for Manulife Asset Management in Boston said technical investors would see a close above that level "as a good omen."
The index closed 4.2 per cent under its September record closing high. It has risen 11.8 per cent so far this year, bolstered by trade hopes and the Federal Reserve's cautious stance on interest rates.
For the week, the S&P rose 0.4 per cent while the Dow fell 0.02 per cent and the Nasdaq rose 0.9 per cent.
Of the 11 major S&P 500 sectors, eight were gainers on the day. The healthcare sector rose 1.4 per cent, providing the biggest boost and supported by gains in companies including health insurer UnitedHealth Group which bounced back after falling for much of the week.
The consumer discretionary sector rose 0.9 per cent, with the biggest lift from Amazon.com.
Foot Locker shares rose 5.9 per cent after the retailer beat quarterly same-store sales estimates and helped drive a 1.9 per cent gain in shares of Nike, the second biggest boost to the sector.
Gap surged 16 per cent, making it the biggest percentage gainer in the S&P, after it said it would separate its better-performing Old Navy brand and close about 230 Gap stores.
The energy sector rose 1.8 per cent despite a decline in oil prices.