Australia

Australian shares look set to open higher despite a mixed overnight session on Wall Street, where Facebook's record decline pushed the tech-heavy Nasdaq more than 1 per cent lower.

In futures trading, the SPI200 futures contract was up 27 points, or 0.44 per cent, to 6,224 points at 08.30 Sydney time. The Australian dollar was buying 73.79 US cents, from 74.28 US cents on Thursday.

On the Nasdaq, Facebook shed a fifth of its value - a record one-day decline of $US119 billion ($161 billion) - after it said three million European users had closed their accounts since the Cambridge Analytica data scandal and predicted years of lower profit margins.

Nonetheless, the Dow Jones Industrial Average closed up 112.97 points, or 0.44 per cent, at 25,527 points, and the S&P500 was down just 8.63 points, or 0.3 per cent, at 2837 points.

The Australian market could benefit from solid commodity prices, with copper, iron ore, oil and spot gold all gaining slightly overnight after the EU and the US agreed to negotiate on trade, easing fears of a trade war.

The local market closed flat on Thursday, with a lower financial sector offsetting gains for local and gold stocks.

Investors are awaiting the release of second quarter US GDP data on Friday - after the ASX is closed for the week.

Out today: PPI first quarter data; New Zealand ANZ consumer confidence for July.

Asia

Asian stocks were held back by weakness in China, where the Shanghai Composite index fell 0.7 per cent and blue-chip shares lost 1.1 per cent.

This capped gains for MSCI's broadest index of Asia-Pacific shares outside Japan to just 0.1 per cent.

The yen fell 0.3 per cent against the US dollar but investors will carefully watch the Bank of Japan's two-day policy review on July 30-31 after this week's brief jump in yields and the Japanese currency on reports authorities were debating paring back some stimulus. 

Europe

European stocks have opened much higher, pushing world stocks to new four-month highs after the European Union and the US agreed to negotiate on trade, easing some of the fears of a trans-Atlantic trade war.

Concerns over the slowing pace of world economic growth and some lacklustre company earnings reports capped some of equity gains, however, as did lingering fears that Washington's trade tensions with China could escalate further.

In what the EU chief called a "major concession," US President Donald Trump agreed on Wednesday to refrain from imposing car tariffs while the two sides launch negotiations to cut other trade barriers.

There were gains across the board for European stocks on Thursday morning, led by the continent's auto sector, which was up 2 per cent at one point. Germany's exporter-heavy DAX, which has come under pressure due to uncertainty over global trade relations, rose 1.8 per cent, its biggest one-day gain since early April.

A pan-European stock index rose half of one per cent while the MSCI world equity index, which tracks shares in 47 countries, hit its highest since March 16 on the news.

The equity gains pushed up government bond yields in the US and Europe, with Germany's 10-year yield, the benchmark for the euro zone, coming close to a one-month high at 0.42 per cent.

The euro, having strengthened on Wednesday, held on to its gains against the US dollar and was at $US1.1731 while the greenback was down 0.20 per cent against a basket of currencies.

North America

Trade and growth worries are taking a toll on some companies' bottom lines.

US auto makers General Motors, Ford Motor and Fiat Chrysler Automobiles have cut profit forecasts, while Germany's Daimler blamed US-China tariffs for a 30 per cent drop in second-quarter profit.

Facebook's plunge highlighted risks for investors and businesses in the current earnings season.

Focus will now turn back to central bank policy and the softer US-EU tone should help the European Central Bank stick with its plan to gradually withdraw stimulus when it meets later on Thursday.

Brent crude was up more than one per cent to hit a 10-day high of $US74.68 a barrel, extending gains into a third day after Saudi Arabia suspended crude shipments through a strategic Red Sea shipping lane.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is a Morningstar content editor, based in Sydney.

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