Australia

Australian shares look set to open flat to a tad higher on the back of a generally stronger performance on Wall Street overnight where investors are eyeing another round of tax cuts for US businesses.

In futures trading, the SPI200 futures contract was up one point, or 0.02 per cent, to 6138 points at 8.30am Sydney time. The Australian dollar is buying 71.15 US cents, from 71.16 US cents on Monday.

On Wall Street the Dow Jones Industrial Average is down 59.47 points, or 0.23 per cent, at 25,857.07 points, while the S&P500 was up 5.45 points or 0.19 per cent at 2877.13 points.

The tech-heavy NASDAQ index is up 21.62 points or 0.27 per cent at 7924.16 points.

Out today: NAB business conditions August, NAB business confidence August

Asia

Japan’s Nikkei share average snapped a six-day losing streak on Monday after robust revised GDP data countered head winds from trade war worries, with financials leading the gains on rise in US bond yields after strong jobs data.

Japan’s Nikkei share average rose 0.30 per cent to 22,373. The broader Topix gained 0.20 percent to 1687.6, the first gains in eight sessions, with advancing issues outnumbering declining ones 1202 to 808

Hong Kong stocks dipped into a bear market before closing just outside as the worsening US-China trade dispute prompted investors to pull out of riskier assets.

The Hang Seng Index closed down 1.3 per cent at 26,613.42 points. An hour earlier, it slid as low as 26,453.29 points, taking its loss from a January 26 high to beyond 20 per cent, a level that defines a bear market.

The benchmark's worst performer was Sunny Optical Technology Group, followed by AAC Technologies Holdings as Apple warned tariffs would affect many of its products and increase costs. Apparel and footwear companies also fell.

Mainland shares fell too. The Shanghai Composite Index fell 1.2 per cent to within 15 points of its 2016 closing low.

Europe

European equities rose as the far-right failed to make as large gains as expected in Swedish elections, while US stocks held earlier gains, cautiously resisting pressure from soaring trade war concerns.

In Europe, investors appeared relieved about the dampening prospect of a “Swexit”, giving Stockholm’s benchmark OMX 30 index of major companies a boost of 0.4 per cent in value at close of trade, while the Swedish krona steadied.

There were similar gains for the Frankfurt and Paris indices, as investors welcomed the thinning prospect of a Swedish bid to follow in Britain’s footsteps and seek to withdraw from the European Union.

North America

US stocks have mostly edged higher, with the S&P 500 and Nasdaq rebounding to snap a four-day losing streak, although a drop in Apple kept gains in check.

The Dow fell on Monday, with Travelers down 1.9 per cent. UnitedHealth shares also weighed on the Dow. The stock fell 3.2 per cent after a Citigroup downgrade.

Apple shares dropped 1.3 per cent, weighing on the three major indexes. But the S&P 500 and Nasdaq rebounded from losses last week.

US President Donald Trump said on Friday he was ready to levy additional taxes on practically all Chinese imports, threatening duties on $US267 billion of goods over and above planned tariffs on $US200 billion of Chinese products.

China said it will respond if Washington takes any new steps on trade. Also, Apple last week said a "wide range" of its products would be hit, although it did not mention the iPhone.

At the same time, investors are optimistic about US economic data and forecasts for earnings.

Investors await the release of consumer price index data this week.

Republicans in the US House of Representatives plan to unveil tax cuts this week, intended to augment Trump's 2017 tax overhaul that added $US1.5 trillion to the federal deficit through permanent tax cuts for US companies.

Shares of United Rentals rose 5 per cent after the company said it was buying privately held equipment rental firm BlueLine Rental.

Among other gainers, Nike rose 2.2 per cent after a report said the footwear maker's Labor Day sales rose, easing concerns about the hit to demand after the Colin Kaepernick advertisement.

Tesla gained 8.5 per cent after brokerages Baird and Bernstein said the electric car maker was on track to be profitable and cash-flow positive in the second half of the year.

Alibaba dropped 3.7 per cent after the company said Jack Ma will step down as chairman in one year, passing on the reins to trusted lieutenant chief executive Daniel Zhang.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is content editor, Morningstar Australia

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