Australia

Australian shares could edge slightly higher at the open despite lingering uncertainty in global markets over US-China trade relations.

In futures trading, the SPI200 futures contract was up six points, or 0.1 per cent, to 6180.0 points on Monday. The Australian dollar is buying 71.59 US cents, from 72.06 US cents at Friday’s close.

There was little direction from Wall Street after US stocks ended little changed on Friday as financials rose with bond yields, while news that President Donald Trump instructed aides to proceed with tariffs on about $US200 billion of Chinese products limited gains.

The S&P financial index was up 0.7 per cent, leading percentage gains among sectors.
Benchmark US Treasury yields rose above three per cent earlier in the day but were last off those levels.

At the same time, the rate-sensitive S&P utilities index fell 0.5 per cent.
The broader S&P 500 index closed 15.26 points, or 0.53 per cent, at 2904.18, and the tech-heavy NASDAQ index is up 9.48 points, or 0.75 per cent, to 8013.71.

Oil prices also pulled back on concerns additional US tariffs would be placed on Chinese imports, after an earlier rally triggered by worries that more sanctions on Iran might constrict supply.

Locally, the Reserve Bank of Australia will tomorrow release the minutes of its last interest rate meeting, potentially offering investors a clue about future decisions.

Asia

Japan’s Nikkei share average rallied to its highest in more than seven-months on Friday as sentiment improved on signs China and the United States make progress towards resolving their trade disputes.

The Nikkei ended 1.2 percent higher to 23,094.67, the highest closing point since early February.

For the week, the benchmark index jumped 3.5 percent, posting the best weekly performance in two months.

Hong Kong stocks rose for a second straight session on Friday, on then optimism about trade talks. The Hang Seng index rose 1 per cent, to 27,286.41, while the China Enterprises Index gained 0.7 per cent, to 10,575.17 points.

Gains were checked by lingering worries over China's economy, and uncertainty over the outcome of US-China trade talks.

China's growth looks set to cool further in coming months, with a barrage of August economic data doing little to dispel views that domestic demand is softening and government support measures will take some time to kick in.

Europe

European shares closed higher on Friday amid gains in tech, auto and mining stocks.

The pan-European STOXX 600 ended up 0.4 per cent, scoring its strongest weekly gains in seven weeks.

Topping the STOXX was bank and asset manager Investec which jumped 8.4 per cent after saying it would demerge and separately list its asset management arm.

Casino, whose stock price has been hit by concerns over its debts and that of parent Rallye, bounced 6.8 per cent after a reassuring note from brokerage firm Kepler-Cheuvreux.

North America

The S&P financial index was up 0.7 per cent on Friday, leading percentage gains among sectors. Benchmark US Treasury yields rose above 3 per cent earlier in the day but were last off those levels.

At the same time, the rate-sensitive S&P utilities index fell 0.5 per cent. A source familiar with the White House decision also said the timing for activating the additional tariffs was unclear.

The move came despite Treasury Secretary Steven Mnuchin's attempts to restart talks with Beijing.

For the week, the Dow was up 0.9 per cent, the S&P 500 was up 1.2 per cent and the Nasdaq rose 1.4 per cent.

Also weighing on utilities was NiSource, which tumbled 11.7 per cent after fire investigators said they suspected a unit of the company, Columbia Gas, was linked to a series of gas explosions in Boston suburbs on Thursday.

Shares of insurer Travelers were up 0.9 per cent as analysts cut loss estimates from Hurricane Florence as the storm weakened.

 

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Lex Hall is content editor, Morningstar Australia

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