Global Market Report - 22 August
Australian shares are expected to open lower, as political turmoil following yesterday's unsuccessful spill motion against Prime Minister Malcolm Turnbull took a heavy toll on local markets.
Australia
Australian shares are expected to open lower, as political turmoil following yesterday's unsuccessful spill motion against Prime Minister Malcolm Turnbull took a heavy toll on local markets.
Australia's share market yesterday fell 60.6 points, 1 per cent - the biggest one-day fall in around five months.
The Australian dollar also fell yesterday, hitting a low of $73.33 before rebounding slightly to close at 73.66 US cents.
US stocks rose on earnings reports in the consumer sector and relative calm in the trade dispute between the United States and China.
In futures trading, the SPI 200 futures contract was down 20 points, or 0.32 per cent, to 6,239 points at 7am, pointing to a lower open for the Australian stock market today.
The tech-heavy NASDAQ index is up 38.17 points or 0.49 per cent at 7,859 points.
ASIA
Asian stocks headed for a largely mixed open on Wednesday.
Japan’s Nikkei overcame recent losses and edged up, after a weakening of the yen spurred futures purchases, but mobile phone carriers tumbled after a media report cited a Japanese official as saying the industry needs reform.
The Nikkei share average, which was down for much of Tuesday, ended the day 0.1 percent higher at 22,219.73.
The US dollar fell below a psychologically important 110 yen level for the first time since 28 June, after US President Donald Trump criticised the Federal Reserve for raising interest rates.
But in the afternoon, the dollar recovered to trade at 110.04 yen, leading investors to buy futures. Index-heavyweight Fast Retailing rose 2.3 percent for the day, adding a hefty 42 points to the Nikkei benchmark.
EUROPE
European shares closed slightly higher yesterday, ahead of the US-China trade talks – scheduled to take place in Washington on Wednesday – which global investors have are cautiously optimistic.
The pan-European STOXX 600 index closed up 0.3 percent.
Gains were made across most sectors, particularly in oil and gas stocks, which posted the best performance as oil prices hit a weekly high, on the back of anticipated supply restrictions and further price support from US sanctions on Iran.
Though the company earnings season is largely over in Europe, John Wood Group was among the top STOXX gainers, up 7.6 percent on positive earnings report.
Peer Saipem gained more than 6.9 percent after winning contracts from Exxon Mobil.
A weaker dollar weighed on companies that make much of their revenue overseas, such as British American Tobacco, down 2.4 percent, and Heineken, down 0.7 percent.
NORTH AMERICA
The S&P 500 climbed to yet another intraday high of 2,873.23 yesterday, as the record nine-and-a-half year bull market becomes, by some measures, the longest in history.
The S&P 500 yesterday closed about 10 points away from record ground – though during the day topped its previous record high of 2,872.87, set on Jan. 26.
Late in the day, stock market futures fell after President Trump’s former personal lawyer, Michael Cohen, pleaded guilty to campaign finance violations and other charges.
Trade-sensitive industrial stocks rose for the fourth consecutive session as investors remained optimistic on the prospect of easing US-China trade tensions. The S&P 500 industrial index rose 0.8 percent.
The S&P consumer discretionary index climbed 0.9 percent as shares of off-price retailer TJX Companies Inc rose on strong results and Toll Brothers Inc’s encouraging quarterly report boosted shares of homebuilders.
The Dow Jones Industrial Average .DJI rose 63.6 points, or 0.25 percent, to 25,822.29, the S&P 500 .SPX gained 5.91 points, or 0.21 percent, to 2,862.96 and the Nasdaq Composite .IXIC added 38.17 points, or 0.49 percent, to 7,859.17.
The small-cap Russell 2000 indexj, less affected by global tariff disputes than its large-cap peers, ended the session up 1.1 percent at a record closing high.
The S&P 500 energy index .SPNY rose 0.5 percent and the S&P 500 materials index .SPLRCM gained 0.4 percent, in tandem with higher prices for oil and metals.
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Glenn Freeman is senior editor, Morningstar Australia
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