Global Market Report - 12 September
The Australian share market is expected to open higher - mirroring an overnight rise on Wall Street - where fresh trade hopes gave tariff-sensitive stocks a boost.
Australia
The Australian share market is expected to open higher - mirroring an overnight rise on Wall Street - where fresh trade hopes gave tariff-sensitive stocks a boost.
The SPI200 futures contract was up 26 points, or 0.39 per cent, at 6,663.0 at 8am Sydney time, suggesting the benchmark S&P/ASX200 will climb at Thursday's open.
The Aussie dollar is buying 68.62 US cents, down from 68.73 US cents on Wednesday.
Wall Street moved higher after after China extended an olive branch ahead of next month's trade negotiations, while Apple stocks soared after the company revealed its latest iPhone upgrade and streaming service launch.
The Dow Jones Industrial Average rose 227.61 points, or 0.85 per cent, to 27,137.04, the S&P 500 gained 21.54 points, or 0.72 per cent, to 3,000.93 and the Nasdaq Composite added 85.52 points, or 1.06 per cent, to 8,169.68.
Meanwhile, oil prices have slipped following a report that US President Donald Trump weighed easing sanctions on Iran.
Gold price gains have been capped by improved risk sentiment, while the value of copper has fallen on weak China car sales data.
The Australian share market closed modestly higher on Wednesday as gains by mining stocks and the banking sector outweighed declines by consumer staples and tech stocks.
Asia
China stocks ended down on Wednesday, after a senior White House adviser played down expectations of fresh trade talks, while the market reacted coolly to a largely symbolic pledge to further liberalise the country’s financial markets.
The blue-chip CSI300 index fell 0.7 per cent, to 3,930.10, while the Shanghai Composite Index lost 0.4 per cent to 3,008.81 points.
Hong Kong stocks closed at their highest since early August on Wednesday, boosted by property and financial firms, while China’s move to exempt some US goods from retaliatory tariffs boosted market sentiment.
The Hang Seng index rose 1.8 per cent, to 27,159.06, while the China Enterprises Index gained 1.6 per cent, to 10,565.01.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.63 per cent, while Japan’s Nikkei index closed up 0.96 per cent.
Europe
European shares hit six-week highs on Wednesday, supported by easing US-China trade tensions and hopes of fresh stimulus from the European Central Bank, while news from individual companies played into the upbeat mood.
Shares of London Stock Exchange hit a record high after Hong Kong Exchanges and Clearing made an unsolicited $39 billion takeover approach, but wanted LSE to ditch its acquisition of data company Refinitiv.
LSE’s shares pared early gains, but closed up about 6 per cent, its biggest percentage gain since the company agreed to buy Refinitiv in a $27 billion deal on Aug. 1.
Meanwhile, chipmakers including Infineon, Dialog Semiconductor, Siltronic and AMS gained between 1.8 per cent and 3 per cent after Apple unveiled three new iPhones on Tuesday.
Shares in Prosus, a spin-off from Naspers that includes the e-commerce group’s 31 per cent stake in Chinese tech giant Tencent, surged more than 25 per cent on their stock market debut in Amsterdam, creating one of Europe’s largest internet companies.
Europe’s tech index gained 1.2 per cent, while the financial services index rose 1.5 per cent, led by LSE.
Gains were broad-based, however, with all subsectors barring oil and gas companies finishing higher.
Investors have been piling into sectors that have lagged broader markets in the past days, driving the banking index .SX7P higher for the sixth straight session.
All eyes are now on the ECB’s monetary policy meeting on Thursday, where it is expected to cut interest rates and restart an asset purchase program at a time when the euro zone’s biggest economy - Germany - might be slipping toward recession.
Recent market moves have highlighted investors’ doubt about how aggressive the central bank will be in providing stimulus, helping debt yields recover.
In the latest sign that trade tensions with the US could be cooling, China’s finance ministry said 16 types of US goods would be exempted from additional retaliatory tariffs effective 17 September.
Germany's trade-sensitive DAX rose 0.74 per cent, while the pan-European STOXX 600 index gained 0.9 per cent to hit its highest since July 30.
London-listed blue-chips outperformed European peers, with mid-caps getting an extra boost from receding risks of Britain crashing out the European Union without a divorce deal, at least for now.
All of the major European indexes have recouped losses sustained in a rough August, with the STOXX 600 up about 8 per cent since touching a low of 361.07 last month.
Zara owner Inditex fell about 4 per cent and was among the biggest decliners on the pan-regional benchmark after it reported weaker-than-expected growth in profit margins in the first half of the year.
Shares of Remy Cointreau gained 3.7 per cent after Bloomberg reported the French spirits group was preparing to name Richemont’s Eric Vallat as its new chief executive officer.
North America
Wall Street has moved higher, led by tariff-sensitive technology and industrial stocks, after China extended an olive branch ahead of next month's trade negotiations with the US.
The S&P 500 on Wednesday closed above the 3,000 mark for the first time since 30 July.
Apple provided the biggest boost to the S&P 500 and the Nasdaq the day after it unveiled its latest iPhone upgrade and announced the launch date of its Apple TV+ streaming service.
Its shares rose 3.2 per cent, once more lifting the company's value above the $US1 ($1.5) trillion mark.
The blue-chip Dow, led by Boeing, posted its sixth consecutive daily gain. Boeing, the largest US exporter by dollar value, gained 3.6 per cent.
China announced tariff exemptions for a basket of US goods, a move viewed by many investors as a show of good faith just weeks ahead of planned talks aimed at resolving the trade war, which has bruised world economies and rattled markets for months.
However, a senior White House adviser urged investors to be patient in an effort to curb expectations for the trade talks scheduled to take place next month in Washington.
In a series of morning tweets, President Donald Trump called on the US Federal Reserve to slash interest rates into negative territory, a move typically seen as a last-ditch effort to revive sluggish economies.
Markets still expect the Fed to cut interest rates by 25 basis points at the conclusion of its monetary policy meeting next week.
US Treasury yields rose for the third straight session ahead of the European Central Bank's meeting on Thursday.
The Dow Jones Industrial Average on Wednesday rose 227.61 points, or 0.85 per cent, to 27,137.04; the S&P 500 gained 21.54 points, or 0.72 per cent, to 3,000.93; and the Nasdaq Composite added 85.52 points, or 1.06 per cent, to 8,169.68.
Of the 11 major sectors in the S&P 500, all but real estate closed in the black.
Chipmaker Micron Technology rose 2.2 per cent after Longbow Research upgraded the stock to "buy".
The Philadelphia SE Semiconductor Index was up 1.5 per cent.
Oilfield services firm Baker Hughes registered the biggest percentage drop in the S&P 500, falling 7.5 per cent, following news that parent General Electric would sell $US3 billion in Baker Hughes shares, resulting in a loss of GE's majority stake.