Global Market Report - 10 October
Australian shares are poised to slip again at the open after a mixed run on Wall Street overnight, though promising commodity prices could lift the local stock market after it endured its worst consecutive sessions since February.
Australia
Australian shares are poised to slip again at the open after a mixed run on Wall Street overnight, though promising commodity prices could lift the local stock market after it endured its worst consecutive sessions since February.
The SPI200 futures contract was down 6 points, or 0.1 per cent, to 6,020.0 at 8am Sydney time on Wednesday, pointing to a subdued open for the ASX, which put in another weak performance on Tuesday as the banks, healthcare, and other global sectors caused the market to lag.
Overnight, Wall Street's major indexes failed to make progress as investors, worried about global growth prospects, fled from materials and industrials stocks.
The Dow Jones was up 12.84 points, or 0.05 per cent, to 26,499.62, the S&P 500 gained 2.97 points, or 0.10 per cent, to 2887.4 and the Nasdaq Composite added 20.68 points, or 0.27 per cent, to 7756.63.
Iron ore and copper prices were up, which could help the local mining sector break its two-day losing streak on Wednesday, but aluminium slipped four a fourth session.
Gold was flat overnight, while oil prices edged higher on growing evidence of falling Iranian crude exports, as well as a partial production shutdown in the Gulf of Mexico because of a hurricane.
The Aussie continues to recover ground as the week advances, and is buying 71.02 US cents on Wednesday, up from 70.87 US cents at Tuesday's close.
In local finance data, the Australian Bureau of Statistics is expected to release building activity figures for June.
The Australian Banking Association is also set to announce a new code of practice, following shoddy dealings like charging customers fees for no service.
Asia
Hong Kong shares ended lower on Tuesday as the Hang Seng index recorded its sixth consecutive day of loss, with concerns over slowing growth and the impact of an escalating Sino-US trade war weighing on investor sentiment.
At the close of trade, the Hang Seng index was 0.1 per cent lower at 26,172.91 points, while the China Enterprises Index gained 0.3 per cent to 10,420.62 points.
The Shanghai Composite index ended 0.2 per cent higher, having repeatedly dipped into the red. The blue-chip CSI300 index, in contrast, was unable to hold onto gains and ended 0.1 per cent lower.
The CSI300 financial sector sub-index ended down 0.2 per cent, the consumer staples sector gained 1 per cent, the real estate index lost 0.8 per cent and the healthcare sub-index ended 0.1 per cent lower.
Europe
European stock markets ended a rollercoaster session higher as tensions lessened in the bond markets and tech stocks recovered, dealers said.
Although still worried about Italy’s fiscal stability, investors breathed a sigh of relief as bond yields eased and the euro slipped against the dollar.
London’s FTSE 100 closed 0.1 per cent higher at 7,237.59 points, while the CAC 40 in Paris rose 0.4 per cent at 5,318.55 and Frankfurt’s DAX 30 lifted 0.3 per cent to finish at 11,977.22.
North America
The Dow and S&P 500 has ended slightly lower as investors, worried about global growth prospects, fled from materials and industrials stocks but falling bond yields kept declines in check in the three major indexes.
The International Monetary Fund cut global economic growth forecasts for 2018 and 2019 and its 2019 US and China estimates, saying the two countries would feel the brunt of their trade war next year.
Meanwhile, US President Donald Trump repeated a threat to impose tariffs on $US267 billion ($376 billion) worth of additional Chinese imports if Beijing retaliates for the recent levies and other measures the United States has taken in the countries' escalating trade war.
The materials index ended down 3.4 per cent, its biggest one-day percentage drop since February 8. Chemical company PPG Industries was its biggest loser, falling 10 per cent after warning that its current-quarter profit would be hit by higher raw material costs and softer demand in China.
But the main indexes gained some support from falling US Treasury 10-year yields after a spike last week had put pressure on equities.
Along with chemicals companies, paper packaging stocks WestRock and Packaging Corp of America both fell 8 per cent, after BMO flagged the risk of rising industry supply.
The trade-sensitive industrials sector lost 1.5 per cent with help from airline stocks, which fell 3 per cent.
American Airlines was its biggest per centage decliner with a 6.5 per cent drop after it said fuel prices were higher than expected in the third quarter, triggering concerns that rising fares were not enough to offset energy costs.
The energy index was the S&P's biggest gainer, with a 1 per cent advance as oil prices rose on growing evidence of falling Iranian crude exports and a partial Gulf of Mexico production shutdown due to Hurricane Michael.
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Morningstar with AAP, Reuters
Lex Hall is content editor, Morningstar Australia
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