Global Markets Report - 3 January
Australian shares are poised to fall at open despite closing Tuesday high, as global markets started the year lower.
Australia
Australian shares are poised to fall at open despite closing Tuesday high, as global markets started the year lower.
ASX futures were 77 points or 1.01% lower at 7539 as of 8:30am AEDT on Wednesday.
US stocks were trading lower Tuesday afternoon as investors take profits - and a step back - after a 2023 rally that left the S&P 500 index just shy of a fresh record. Major stock indexes mostly fell. The tech-focused Nasdaq led the way lower, dropping more than 1%, as shares in Apple and major chip companies came under pressure. The S&P 500 declined 0.4%. The Dow industrials edged higher.
In commodity markets, Brent crude oil fell 1.36% to $US75.99 a barrel and Gold fell 0.22% to $US 2,058.43 and Iron ore up 2.2% to $US141.75 a tonne.
In local bond markets, yields on Australian 2 Year government bonds was up slightly at 3.74% and the 10 Year yield edged up to 4.00%. Overseas, the US Treasury notes rose marginally, with the yield on 2 Year up to 4.32% and the 10 Year yield up at 3.94%.
The Australian dollar retreated to 65.57 US cents from its previous close of 68.10. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies was up at 96.53.
Asia
Chinese shares closed lower on the first trading day of 2024. Investors continue to hope for more fiscal and monetary stimulus to end the deflationary cycle, an ANZ analyst said. Beverage and semiconductor stocks led the session's losses with Kweichow Moutai shedding 2.4% and Shanxi Xinghuacun Fen Wine Factory falling 3.9%. Will Semiconductor lost 3.5% and LONGi Green Energy Technology declined 3.1%. Among the gainers, shipping company Cosco Shipping Holdings rose 2.8% and China Shenhua Energy gained 3.3%. The benchmark Shanghai Composite Index lost 0.4% to 2962.28, the Shenzhen Composite Index dropped 0.8% and the ChiNext Price Index declined 1.9%.
Hong Kong shares closed lower, dragged by consumer-related and property stocks. With China still tackling local-government debt and property-sector woes, Beijing will likely ramp up economic support through more forceful fiscal policy and less reliance on monetary policy, Maybank analyst Sonija Li says in a note. China Resources Beer led losses, dropping 8.3%. Li Ning and China Mengniu Dairy shed 5.8% and 5.4%, respectively. Property developer Longfor Group lost 7.0% and China Resources Land was down 5.4%. Among the top gainers, NetEase rose 3.9%. Sands China and China Shenhua Energy advanced 3.9% and 2.8%, respectively. The benchmark Hang Seng Index ended 1.5% lower at 16788.55. The Hang Seng Tech Index declined 1.3%.
Nikkei futures are 320 points lower at 33095 on the SGX. The yen's mild strength, which hurts overseas earnings of Japanese exporters when repatriated to Japan, may be weighing on Nikkei futures. USD/JPY is at 140.91, compared with 141.03 in late New York trading Friday. The Nikkei Stock Average closed 0.2% lower at 33464.17 on Friday, marking a 28% increase for 2023 and making it Asia-Pacific's top performer. Japanese equities markets are closed Tuesday and Wednesday.
Indian shares ended lower, tracking losses among most regional markets. Bank and IT stocks led losses. ICICI Bank dropped 1.9% and Kotak Mahindra Bank was 2.4% lower. Wipro shed 1.7% and Tech Mahindra dropped 1.6%. Sun Pharmaceutical Industries was the best performing stock on the benchmark index, gaining 2.85%. Despite ending lower this session, the market could maintain its momentum in 2024, supported by the stronger balance sheet of corporate India and the enhanced health of the local banking system, Axis Securities said in a research note. The benchmark Sensex ended 0.5% lower at 71892.48.
Europe
European stocks erased earlier gains, though Maersk shares float 6% higher after the Danish shipping giant said it would indefinitely suspend services through the Red Sea following a weekend attack on one of its vessels. "We have made the decision to pause all transits through the Red Sea/Gulf of Aden until further notice," CNBC quoted the company as saying in a note to customers. Banks and oil majors also rose, despite a 0.9% fall in Brent crude to $76.35 a barrel, though insurers, investment and property stocks are among the biggest losers. The Stoxx Europe 600 dropped 0.2% and the CAC 40 backtracked 0.3%, though the DAX advanced 0.1%, while the Dow traded broadly unchanged.
The FTSE 100 index closed Tuesday down 0.15% at 7721 points, slipping from its seven-month high and in line with global peers. The blue-chip index's first day of trading in 2024 was mainly dragged by financial stocks, while nearly all stocks closed in negative terrain, with miner Fresnillo being the worst performer as shares closed down 3.9%. Shares of Diploma, supplier of specialized technical products and services, was down 3.7%, while St. James's Place shares slipped 3.6%. Pharmaceutical heavyweights GSK and AstraZeneca led a short group of risers, with shares up 2.0% and 1.8%, respectively.
North America
US stocks were trading lower Tuesday afternoon as investors take profits - and a step back - after a 2023 rally that left the S&P 500 index just shy of a fresh record. Major stock indexes mostly fell. The tech-focused Nasdaq led the way lower, dropping more than 1%, as shares in Apple and major chip companies came under pressure. The S&P 500 declined 0.4%. The Dow industrials edged higher.
Oil prices fell. Crude pulled back after initially shooting higher when Iranian state media reported that Tehran sent a warship to the Red Sea. Maersk said it would pause all transit through the Red Sea and Gulf of Aden.
Bitcoin prices climbed to above $45,000.
Treasury yields rose, pushing the 10-year yield above 3.9%.
Japan's yen weakened after a powerful earthquake, while its stock market was closed for a public holiday. Chinese data showed that manufacturing activity shrank in December. Mainland shares fell.
