Global Market Report - 29 August
Australian shares look set to open slightly lower on the back of a small rises on Wall Street overnight following a rally on positive developments in trade disputes, which have vexed the markets.
Australia
Australian shares look set to open slightly lower on the back of a small rises on Wall Street overnight following a rally on positive developments in trade disputes, which have vexed the markets.
In futures trading, the SPI200 futures contract was down six points, or 0.1 per cent, to 6270 points at 8.30am. The Australian dollar is buying US73.37c, from US73.45c on Wednesday.
On Wall Street the Dow Jones Industrial Average closed up 14.38 points, or 0.06 per cent at 26,064 points, while the S&P500 ended 0.78 points or 0.03 per cent higher at 2897 points.
The tech-heavy Nasdaq index lifted 12.14 points or 0.15 per cent at 8030 points.
Following a US-Mexico agreement on Monday to overhaul the North American Free Trade Agreement (NAFTA), focus shifted to Canada, with its top trade negotiator joining her Mexican and US counterparts in Washington in a bid to remain in the trilateral pact.
Building materials giant Boral has posted a 38 per cent jump in annual underlying profit, beating a consensus estimate from analysts, driven by Australia’s booming infrastructure construction market and growth from its Headwaters unit in the US.
Infant formula maker Bellamy’s Australia has swung to a full-year profit of $43.27 million for the year to June 30, from an $809,000 loss in the previous year, helped by higher sales and cost savings.
Asia
Japan’s Nikkei breached 23,000 on Tuesday thanks to the United-States-Mexico trade deal, then shed most of the gains on profit-taking but still ended the day at its highest close since mid-June.
The Nikkei share average finished the day up 0.1 percent at 22,813.47.
Three of China's biggest four state-owned lenders reported higher profits for the first half of the year, as bad loan ratios held steady. China Construction Bank Corp, Agricultural Bank of China and Bank of China also posted steady or wider net interest margins over the same period.
Net profit for AgBank, the first of the so-called Big Four Chinese state lenders to report interim results, rose 7 per cent from a year ago to 115.8 billion yuan ($US16.85 billion) for the six months ended June. BoC posted a 5 per cent rise in profit to 109.1 billion yuan, while CCB netted a 6 per cent rise, raking in 147.0 billion yuan.
In Hong Kong, the Hang Seng index closed 0.3 per cent higher at 28,351.62, while the China Enterprises Index closed up 0.4 per cent at 11,097.59 points.
The sub-index of the Hang Seng tracking energy shares rose 0.6 per cent, while the IT sector closed up 0.75 per cent. The financial sector ended up 0.24 per cent. The property sector was flat.
The top gainer on Hang Seng was China Shenhua Energy, which rose 2.7 per cent, while the biggest loser was Country Garden Holdings Co Ltd, which closed down 3.29 per cent.
China's main Shanghai Composite index closed down 0.1 per cent at 2780.899 points, while its blue-chip CSI300 index ended down 0.19 per cent.
Europe
European markets mostly climbed overnight after Wall Street set records following the US-Mexico trade deal.
London closed 0.5 per cent higher and Paris added 0.1 per cent. Frankfurt bucked the trend, ending the day down nearly a tenth of a percentage point after having spent most of the day in the green.
The US-Mexico agreement raises hopes that NAFTA, which also includes Canada and was rejected by the White House soon after US President Donald Trump’s election, can be salvaged after Canada rejoins talks on Tuesday.
North America
The S&P 500 and the Nasdaq have edged up to record closing highs for the third consecutive session as investors struggled over whether to take profits following a rally on positive developments in trade disputes.
The Dow Jones Industrial Average also closed marginally higher in a late summer, low-volume session of back-and-forth trading as investors debated whether to cash in or ride the market's momentum.
Technology companies led the advance, offset by declines in energy, telecom and materials sectors, among others.
Luxury retailer Tiffany & Co reported better-than-expected second-quarter results and raised its full-year profit forecast. The stock closed up 1 per cent.
Sears Holding stock surged by 12.6 per cent as its Auto Center partnership with Amazon.com expanded, its services now available nationwide. The partnership was first announced in May.
Yum China Holdings rose 3.9 per cent following a Wall Street Journal report that the fast food operator rejected a buyout.
Of the 11 major sectors of the S&P 500, four ended the session in positive territory, with real estate and technology posting the biggest percentage gains.
Tesla stock extended its decline, falling 2.3 per cent in the wake of chief executive Elon Musk's decision to abandon his take-private scheme. Separately, broker Canaccord Genuity said it expects the electric automaker to miss its Model 3 production targets.
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Lex Hall is content editor, Morningstar Australia
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