Global Market Report - 12 September
Australian shares look set to open lower following falls in some base metals prices, weighed down by concerns over trade disputes between the US and some of its major trading partners, and a fall in steel prices.
Australia
Australian shares look set to open lower following falls in some base metals prices, weighed down by concerns over trade disputes between the US and some of its major trading partners, and a fall in steel prices.
In futures trading, the SPI200 futures contract was down 14 points, or 0.23 per cent, to 6162 points, at 8.30am Sydney time. The Australian dollar is buying 71.17 US cents, from 71.23 US cents on Tuesday.
Nickel prices hit an eight-month low and zinc slipped to its lowest level in three weeks, while copper gave up the gains made earlier in the session to finish lower.
Steel prices shed more than four per cent after a source involved with China's output-cut plan said the environment ministry could allow northern provinces to set their own production curbs over winter.
US stocks were higher in offshore trade as Apple led a jump in technology shares and gains in oil prices drove up energy shares.
On Wall Street the Dow Jones Industrial Average is up 113.99 points, or 0.44 per cent at 25,971 points, while the S&P500 is up 10.76 points or 0.37 per cent at 2,887 points.
The tech-heavy NASDAQ index is up 48.31 points or 0.61 per cent at 7972 points.
Asia
Asian stocks are coming off the back of nine days of losses, the longest streak of declines in four years, as emerging-market turmoil continues and a sell-off in technology shares deepens.
Hong Kong shares fell into bear market territory on Tuesday as the Hang Seng index ended at a near 14-month low, with investors around the region fearing further escalation in the Sino-US trade war.
The Hang Seng index ended down 0.7 per cent at 26,422.55, its lowest close since July 14, 2017. The China Enterprises Index lost 0.96 per cent to 10,333.16 points.
Tuesday's close marks a fall of 20.3 per cent from the year's highest close on January 26, and is 21.1 per cent below the index's 52-week high recorded on January 29, placing the Hang Seng firmly in the bear-market territory.
Shares in Tencent Holdings ended 1.8 per cent lower, after touching their lowest level since July 31, 2017, after China's biggest gaming and social media firm said a popular game had been shut down amid a widening gaming crackdown on the mainland.
At the close, the Shanghai Composite index was down 4.69 points or 0.2 per cent at 2669.48. It was the lowest close for the index since January 28, 2016. Earlier in the session, the index hit an intraday low of 2652.70, its lowest level since February 29, 2016.
Europe
A recovery in European shares stalled on Tuesday as US-China trade tensions weighed on the market and investors seized on China's demand for sanctions from the WTO as a reason to take the market lower.
The STOXX 600 turned down after a positive open, down 0.2 per cent by the close, as trade-sensitive autos and mining stocks buckled under pressure from rising tensions between the US and China.
Autos and miners both fell 1 per cent. Steel giant ArcelorMittal fell 2 per cent after it raised its bid for India's debt-laden Essar Steel in competition with Russia's VTB and Vedanta Resources.
Germany's DAX, heavy in industrials and exporters, fell 0.8 per cent, while strength in the pound on bets of a Brexit deal dragged Britain's FTSE 100 down 0.3 per cent.
Mark Carney will remain Bank of England chief until January 2020 to steer the UK economy through possibly "quite a turbulent period" post-Brexit, UK finance minister Philip Hammond announced Tuesday.
North America
US stocks have risen with Apple leading a jump in technology shares as a gain of more than 2 per cent in oil prices drove up energy shares.
Apple rose 2.5 per cent on Tuesday, boosting the three major indexes, a day ahead of its expected unveiling of new iPhone models.
The S&P technology sector gained 0.8 per cent, its biggest percentage jump in two weeks, also boosted by Microsoft, up 1.7 per cent, and Facebook, up 1.1 per cent.
The technology sector is up close to 18 per cent for the year so far, leading sector gains in the S&P 500 along with consumer discretionary, also up roughly 18 per cent since December 31.
The energy index, up 1 per cent, helped to lift the S&P 500, with shares of Exxon Mobil up 1.4 per cent and Chevron up 0.5 per cent. Oil prices rose after US sanctions squeezed Iranian crude exports and tightened global supply.
Also gaining were shares of companies that could see a boost in sales in the aftermath of Hurricane Florence, which was upgraded to Category 4 and was expected to make landfall in the Carolinas later this week.
Home improvement retailer Home Depot was up 1.5 per cent and Lowe's Companies was up 1.6 per cent, while shares of construction material companies also rose.
The gains came despite lingering trade tensions. China told the World Trade Organisation it
wanted to impose sanctions on the US for its non-compliance with a ruling in a dispute over US dumping duties.
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Lex Hall is content editor, Morningstar Australia
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