Global Market Report - 13 November
An opening dive looms for the Australian share market in the wake of a Wall Street tech sector sell-off, while the Aussie dollar has also been knocked below 72 US cents overnight.
Australia
An opening dive looms for the Australian share market in the wake of a Wall Street tech sector sell-off, while the Aussie dollar has also been knocked below 72 US cents overnight.
The SPI200 futures contract was down 57 points, or 0.96 per cent, to 5874.0 at 8am Sydney time on Tuesday, pointing to a lower open for the ASX after an energy-powered recovery lifted the bourse into the black on Monday.
The Australian dollar is buying 71.89 US cents, down from 72.17 US cents on Monday.
On Wall Street overnight, Apple shares slumped after two suppliers cut their forecasts, sparking a sell-off in other iPhone component makers and weighing on the Nasdaq, which fell about 2.5 per cent to 7218.53.
The Dow Jones Industrial Average was also down 492.79 points, or 1.90 per cent, at 25,496.51, and the S&P 500 was down 45.77 points, or 1.65 per cent, at 2735.24.
Out today: NAB October business conditions and confidence reports.
ASIA
Stocks in Hong Kong moved up marginally on Monday, but were left out from the policy-inspired rally seen in the technology sector in the mainland market, as investors in the city appeared cautious ahead of key earnings announcements and global events.
The main Hang Seng index and the Hang Seng China Enterprises index each ended 0.1 per cent firmer.
Tencent Holdings, which is due to report its third quarter earnings on Wednesday, was the second worst performer in the Hang Seng and worst among H-shares on Monday, dropping 3.1 per cent. The company's shares were battered last Friday after a brokerage cut its target price.
In Tokyo, the Nikkei share average gained 0.1 per cent to 22,269.88 after trading lower in early deals. The benchmark index fell to as low as 22,046.29, but traders said that futures buying supported the market.
EUROPE
European shares were lower on Monday led by a sell-off in technology stocks after earnings and M&A news from German heavyweights Infineon and SAP, and tobacco was hit by new signs of US regulators tightening the screws on menthol cigarettes.
The pan-European STOXX 600 benchmark index fell 1 per cent, reversing earlier gains.
The swift slide into the red, ending a tentative recovery from Friday's losses, highlights the fragility of market sentiment amid lingering worries about Italy's budget crisis, a Brexit deal and expectations for a US interest rate hike.
News that Banca Carige has around €400 million to plug a hole in its capital base also underscored concerns about the health of the banking sector in the 3rd largest euro zone economy.
Trading in the lender's shares were suspended pending an announcement. Just before the market close, Carige approved measures totalling €400 million, including the issue of a subordinated bond which is convertible into shares.
NORTH AMERICA
Wall Street's major indexes declined, with the S&P 500 weighed down by technology and financial stocks as shares of Apple and Goldman Sachs came under pressure.
Apple shares fell 4.7 per cent after several suppliers to the company, including Lumentum Holdings, whose components power the iPhone's Face ID technology, cut their forecasts.
Apple's decline impeded the tech-heavy Nasdaq, which fell more than 2 per cent.
Lumentum shares plunged 33 per cent. Shares of several chipmakers that sell to Apple, such as Cirrus Logic, Qorvo and Skyworks Solutions, dropped as well.
Goldman Sachs shares dropped 7.2 per cent after Bloomberg quoted the Malaysian Finance Minister Lim Guan Eng saying the country was seeking a full refund of all the fees it paid to the Wall Street bank for arranging billions of dollars of deals for troubled state fund 1MDB.
Goldman Sachs was the biggest drag on the Dow, which fell nearly 2 per cent.
Among the S&P 500's 11 major sectors, technology and financial stocks weighed most heavily on the index. The S&P 500 technology sector index fell 3.3 per cent, and the financial sector index fell 1.8 per cent.
A holiday in the US bond markets for Veterans Day kept trading volume muted.
General Electric Co shares fell 7.2 per cent after chief executive officer Larry Culp said the company was saddled with too much debt and would urgently sell assets to reduce levels of leverage. The shares dropped below $US8 for the first time since March 2009.
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Morningstar with AAP, Reuters
Lex Hall is content editor, Morningstar Australia
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