Global Market Report - 10 December
Australian shares weathered the worst of a late-week global sell-off but the local bourse is set to slide into a new session with ongoing trade uncertainty between China and the US.
Australia
Australian shares weathered the worst of a late-week global sell-off but the local bourse is set to slide into a new session, with trade uncertainty between China and the US continuing to weigh on global markets.
The SPI200 futures contract is down 30 points, or 0.53 per cent, to 5637.0, at 8am Sydney time on Monday, pointing to a drop at the open for the ASX. The Aussie dollar has edged to a near six-week low, buying 71.76 US cents, down from 72.29 US cents on Friday.
Internet and technology shares took the biggest hit during a broad sell-off on Wall Street on Friday, with the benchmark S&P 500 index posting its biggest weekly percentage drop since March.
Locally, the benchmark S&P/ASX200 index was up 23.8 points, or 0.42 per cent, at 5757.9, on Friday, while the broader All Ordinaries rose 0.37 per cent, as the bourse shrugged off a choppy Wall Street session and subdued oil prices.
Oil prices have since edged higher on an OPEC-led cut, while copper is also up, but iron ore has slipped.
Gold prices have surged nearly $12 an ounce since Friday to a five-month peak thanks to a softer US dollar.
Fresh housing data is expected from the ABS and CoreLogic on Monday. Australia must be prepared for a hard landing in the housing market that could cause financial instability and hamper economic growth, a global forum warns.
The Organisation for Economic Co-operation and Development's latest assessment of Australia points to elevated levels of household debt after years of booming prices.
But house prices have fallen since late 2017 and while the market was on track for a soft landing, the risk of a hard landing remained and regulators should be ready for the fallout.
Elsewhere, investors will also be looking ahead to speeches from Reserve Bank officials later in the week, as well as further data on business and consumer confidence.
ASIA
Hong Kong stocks closed lower on Friday, overshadowed by the arrest of senior Huawei executive Meng Wanzhou, which has dented hopes of a resolution to the US-China trade war.
The Hang Seng index fell 0.4 per cent, to 26,063.76, while the China Enterprises Index lost 1.1 per cent, to 10,369.40 points.
The top gainer on the Hang Seng was Link Real Estate Investment Trust, which rose 2.72 per cent, whereas Sino Biopharmaceutical fell 7.88 per cent.
Elsewhere in the region, MSCI's Asia ex-Japan stock index edged up 0.19 per cent, while Japan's Nikkei index closed up 0.82 per cent.
EUROPE
European stocks closed flat despite mixed third-quarter earnings and increasing tensions between the European Union and Italy over its budget.
The pan-European STOXX 600 dipped 0.06 per cent to end the week with a 0.7 per cent gain.
Germany's DAX was the only major bourse to close in the red on the day. Medical supplies group Fresenius plunged 17 per cent.
On the FTSE, investment platform provider AJ Bell debuted with a gain of 37.5 per cent, a rare bright note amid the Brexit clamour.
In France, stocks closed higher, led by gains in industrials and financials. The CAC 40 gained 0.68 per cent. Among the gainers was Bouygues, which rose 3.84 per cent.
NORTH AMERICA
Wall Street has tumbled in a broad sell-off led by declines in big internet and technology shares, and the benchmark S&P 500 index posted its biggest weekly percentage drop since March as concerns over US-China trade tensions and interest rates convulsed Wall Street.
Concerns over China-US trade tensions sank US stocks on Friday, overshadowing the lift from higher oil prices and jobs data. US Trade Representative Robert Lighthizer says US-China trade negotiations must reach a successful end by March 1 or new tariffs will be imposed, clarifying there is a "hard deadline" after a week of seeming confusion among President Donald Trump and his advisers.
The Dow Jones Industrial Average fell 558.72 points, or 2.24 percent, to 24,388.95, the S&P 500 lost 62.87 points, or 2.33 percent, to 2633.08 and the Nasdaq Composite dropped 219.01 points, or 3.05 percent, to 6969.25.
Wall Street saw its biggest weekly losses since March, led by declines in big internet and technology shares.
The fall was a reversal from earlier in the day, when stocks were higher on US labour data that showed employers hired fewer workers than expected in November.
That supported a view that US growth is moderating and the US Federal Reserve may stop raising rates sooner than previously thought.
Non-farm payrolls increased by 155,000 last month, but missed economists' expectation for a rise of 200,000.
Oil climbed after big Middle East producers in OPEC agreed to reduce output to drain global fuel inventories and support the market.
US crude rose 1.42 per cent to $US52.22 per barrel and Brent was last at $US61.39, up 2.21 per cent on the day.
The US dollar weakened against major currencies after the US jobs data. The US dollar index, which tracks the greenback against a basket of six other currencies, fell 0.17 per cent, with the euro up 0.24 per cent to $US1.1401.
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