Australia

Bruised Australian stocks look set to take another dive at the dawn of a new trading week, with the futures market not appearing to have taken a hint from Wall Street's late-week rally, or a slight jump in metals prices.

The SPI200 futures contract was down 51 points, or 0.87 per cent, to 5803 at 8am Sydney time on Monday, pointing to a further retreat at the open for the ASX, hot off the heels of its worst trading week in almost three years.

On Wall Street, The US benchmark S&P 500 had snapped a six-day losing streak on Friday, with investors looking for bargains ahead of the third quarter earnings reporting season.

The Dow Jones Industrial Average also rose on Friday, gaining 287.16 points, or 1.15 per cent, to 25,339.99, and the Nasdaq Composite added 167.83 points, or 2.29 percent, to 7496.89.

But analysts warn that until the US and China reach a trade deal, the rebound in the stockmarket could be vulnerable with investors anxious about the impact of tariffs on corporate profits.

Oil prices followed the US market to close slightly higher, while metals also rebounded with modest gains.

But gold prices, which added rare lustre to the market during an otherwise subdued week, are set to dip as global stocks rebound and the US dollar gains.

The Australian dollar was trading at 71.12 US cents on Monday, down from its highs of last week when it topped 72 cents.

In local news on Monday, Wesfarmers will announce the first quarter retail sales results for Coles, having already confirmed plans to demerge the supermarket chain next month.

Meanwhile, telco giant Telstra will hold its annual general meeting in Sydney.

On Tuesday the Reserve Bank will release its latest board minutes, having left interest rates on hold at 1.5 per cent earlier this month.

Asia

The Hang Seng Index rose 2.1 per cent in Hong Kong. Tencent Holdings posted its biggest gain since 2015 after sliding for a record 10 days. Shanghai's benchmark reversed morning losses to close 0.9 per cent higher.

The Shanghai Composite Index is among the world's worst performing equity gauge this year, down 21 per cent.

After tumbling the most since 2016 on Thursday, the benchmark fell as much as 1.8 per cent Friday before reversing the loss. The Shenzhen Composite Index fell 10 per cent this week.

The Hang Seng Index rose to 25,801.49 as companies from Tencent to Sunny Optical Technology Group rebounded from heavy losses. The benchmark is still down for the week though after plunging the most since February 6 on Thursday.

Europe

European stocks failed to rally on Friday, posting their worst week since a market correction last February as a new sell-off hit bourses across the globe.

Euro zone stocks initially jumped 1 per cent but rapidly shed all of their gains despite Wall Street opening higher.

All major bourses closed down and the main regional index ended the day down 0.2 per cent and on a weekly loss of 4.8 per cent.

North America

The US benchmark S&P 500 stock index has snapped a six-day losing streak with technology stocks recovering after a week of losses and investors looking for bargains ahead of the third quarter earnings reporting season.

Even the hard-hit S&P500 energy and financial sectors managed to close Friday's session with slight gains after a late afternoon rally.

The S&P technology index gained 3.2 per cent on the day, showing its strongest one-day gain since March 26, although it still registered its biggest weekly drop since March 23.

But until the US and China reach a trade deal, the rebound in the stockmarket could be vulnerable as investors are anxious about the impact of tariffs on corporate profits.

The technology sector's biggest boosts were Apple and Microsoft, which rose more than 3 per cent. Visa and Mastercard climbed almost 5 per cent boosted by strong credit card sales included in bank earnings reports.

The S&P500's financial sector ended the day up 0.1 per cent and the S&P 500 banks subsector closed down 0.4 per cent, well above its session low.

The biggest drag on the subsector was JPMorgan Chase & Co, which closed down 1 per cent despite reporting a quarterly profit that beat expectations.

PNC Financial led the losers among bank stocks, with a 5.6 per cent drop after the regional bank reported disappointing quarterly loan growth and said it expected only a small improvement in lending this quarter.

The three gainers among banks included Citigroup, which rose 2 per cent, and Wells Fargo, which eked out a 1.3 per cent gain after upbeat results.

Netflix and Amazon, some of the names that took a big hits in the week's selloff, rose 5.7 per cent and and 4.0 per cent respectively.

The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from Donald Trump's trade war with China.

Earnings at S&P 500 companies are estimated to have risen 21.5 per cent in the third quarter, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.

Energy stocks ended the day up 0.3 per cent as oil prices steadied to settle up slightly after a volatile session dropped on a weakening oil demand outlook.

The consumer discretionary and communication services sectors, both rose more than 2 per cent.

 

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Morningstar with AAP, Reuters 

Lex Hall is content editor, Morningstar Australia

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