Global Market Report - 14 November
The Australian share market is set for a subdued open after its worst day in more than two weeks, with choppy Wall Street trade providing little lead overnight.
Australia
The Australian share market is set for a subdued open after its worst day in more than two weeks, with choppy Wall Street trade providing little lead overnight.
The SPI200 futures contract was down 6 points to 5826.0 at 8am Sydney time on Wednesday, pointing to a flat open for the ASX, after a dismal performance by banking, health and tech stocks dragged the bourse lower on Tuesday.
Wall Street's battered tech sector dusted itself off overnight, while industrial stocks gained on US-China trade hopes, but the market struggled for momentum. Overseas energy stocks were a particular drag after US oil futures closed down 7.1 per cent, for a record 12th straight decline and the lowest since November 2017.
The Dow Jones Industrial Average fell 126.93 points, or 0.5 per cent, to 25,260.25, the S&P 500 lost 4.23 points, or 0.16 per cent, to 2721.99 and the Nasdaq Composite added 1.81 points, or 0.03 per cent, to 7202.67.
Lcoally, miners Newcrest and Fortescue Metals are scheduled to hold their annual general meetings, as are Medibank Private and Ramsay Health Care.
Nine Entertainment will also hold its annual meeting in Sydney, ahead of its likely merger with Fairfax Media, while Seven West Media shareholders will also meet.
Dulux Group will detail full-year earnings.
The Australian dollar is steady, buying US72.11c, slightly down from US72.16c on Tuesday.
ASIA
Stocks in Hong Kong rose on Tuesday as Beijing and Washington are said to be preparing for fresh trade talks, helping investors overcome the overnight rout in the US markets. The Hang Seng index gained 0.6 per cent to 25792.87 and the Hang Seng China Enterprises index edged up 0.4 per cent.
Tencent Holdings-backed online Chinese travel firm Tongcheng-Elong launched a far smaller-than-expected Hong Kong IPO of up to $US233 million on Tuesday, amid a weak stock market and a string of poor performances from recent listings in the city.
Tongcheng-Elong, which is also backed by travel website Ctrip.Com International, is selling about 143 million shares at a price range of $HK9.75-$HK12.65, giving it a potential valuation of $US3.65 billion, according to a term sheet seen by Reuters.
The company had earlier been seeking to raise up to $US1 billion, but weak markets and a slide in Ctrip's share price forced it to slash the size of the IPO, according to Refinitiv publication IFR.
Japanese stocks touched a two-week low on Tuesday, with technology firms coming under heavy selling pressure after shares of Apple tumbled.
The Nikkei, however, pared its losses by the close and was off a session low of 21,484.65 - its weakest since October 30 - on reports China and the US have resumed high levels talks. The benchmark ended the day down 2.1 per cent at 21,810.52.
EUROPE
European shares recovered on Tuesday as hopes for an easing of the Sino-US trade war and an imminent Brexit deal chased away the previous session's fears of a peak in tech stocks.
The pan-European STOXX 600 rose 0.7 per cent in a broad-based recovery with Germany's DAX up 1.3 per cent as investors turned to some strong results and tech stocks recovered.
Europe's tech sector jumped 1.7 per cent, having tumbled sharply in the previous session when Wall Street's tech stocks sank on fears that sales of Apple's iPhone have peaked.
NORTH AMERICA
US stocks have risen as technology stocks bounced back after a steep sell-off in the previous session and hopes of progress in the US-China trade talks boosted industrials, even though a decline in Apple curbed gains.
The S&P technology index rose 0.6 per cent on Tuesday following three days of losses, but shares of Apple edged 1.3 per cent lower, entering its fourth day in the red.
Also helping the markets was a report that said China's top trade negotiator was preparing to visit the US before a meeting between the leaders of the world's two largest economies.
The trade-sensitive industrial sector rose 0.5 per cent, boosted by shares of Caterpillar and United Technologies.
The development comes as China President Xi Jinping and US President Donald Trump plan to meet on the sidelines of a G20 summit that is being held in Argentina at the end of November.
The main indexes tumbled in the previous session on Monday as shares of Apple slid 5 per cent after several suppliers to the iPhone maker cut their forecasts, signalling that demand for the phones could be softening.
Following that, Goldman Sachs cut its earnings estimate for Apple and another key supplier Foxconn, reported a weaker than expected rise in quarterly profit.
After a stellar rally for technology shares that has fuelled a decade-long gain for US stocks, appetite for the group has started to wane lately on concerns about tighter regulation and demand for chipmakers.
Allocation to the global tech sector collapsed to the lowest since February 2009, according to a Bank of America Merrill Lynch survey that also showed the S&P 500 index was broadly expected to rise 12 per cent more before peaking.
The Dow was weighed down by shares of Home Depot, which reversed course to fall 0.9 per cent following the No 1 home improvement chain's results. Boeing's shares also fell 3.5 per cent.
Nine of the 11 major S&P sectors were higher, but the energy index was lower as oil prices fell more than 2 per cent and the utilities sector also declined.
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Morningstar with AAP, Reuters
Lex Hall is content editor, Morningstar Australia
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