Tuesday 12th March 2019

OPENING CALL: The Australian market looks to open higher with SPI Futures up 38 points.

Australia’s S&P/ASX 200 index closed 0.4% lower at 6180.2, as weak U.S. jobs data stoked worries over the global economic growth outlook and more than offset excitement at M&A activity in the gold sector.
U.S. stocks rose intraday, powered by gains in technology shares.  The Dow Jones Industrial Average climbed 140 points, or 0.6%, to 25589. The S&P 500 advanced 1.3% and the tech-heavy Nasdaq Composite added 1.8%.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australia’s S&P/ASX 200 index closed 0.4% lower at 6180.2, as weak U.S. jobs data stoked worries over the global economic growth outlook and more than offset excitement at M&A activity in the gold sector. Newcrest Mining gained 3.8% to A$25.43 after agreeing to buy a 70% stake in a Canadian gold mine for $806.5 million, with the CEO also signaling that it has enough firepower to do more deals including any assets put up for sale if Barrick and Newmont combine. Other mining stocks fell, however, with BHP down 1% at A$36.52 and Rio Tinto dropping 0.7% to A$89.99. Banks were broadly flat, with Westpac eking out a 0.2% gain to A$27.02. Telstra’s defensive qualities shone with a 0.6% lift to A$3.24.

US Markets

U.S. stocks rose intraday, powered by gains in technology shares. The Dow Jones Industrial Average climbed 140 points, or 0.6%, to 25589. The S&P 500 advanced 1.3% and the tech-heavy Nasdaq Composite added 1.8%. Tech shares in the S&P 500 advanced 2.1% after Nvidia agreed to buy computer-networking supplier Mellanox Technologies in an all-cash deal valued at roughly $7 billion. Nvidia’s shares rose 7.3% while Mellanox’s shares jumped 8.4%. Shares of tech companies, the darlings of the stock market in recent years, were pummeled in the bruising fourth-quarter selloff amid worries about the health of the now 10-year-old bull market for stocks. But shares have broadly bounced back this year, with the tech sector up 15% so far this quarter.

Commodities

Gold futures finished lower, pulling back after bullion failed to settle above the psychologically significant $1,300 mark despite a rally late last week. Better-than-expected U.S. retail sales and business inventories data, which helped provide a boost to U.S. benchmark stock indexes, also put pressure on haven gold in Monday dealings. Business inventories rose 0.6% in December, while retail sales rebounded by 0.2% in January, after tumbling by a revised 1.6% a month earlier. April gold shed $8.20, or 0.6%, to settle at $1,291.10 an ounce after trading as high as $1,299.30 during the session. Bullion rose 1% on Friday and briefly exceeded $1,301 intraday. That capped a volatile week that saw the most-active contract finish little changed from the week-ago settlement. In other commodity markets, March wheat prices fell 10 1/2 cents to $4.22 1/4.

Iron Ore: 81.38s – 0.79 (April Contract)

Oil Futures

Oil prices climbed, supported by signs that aggressive OPEC production cuts are
rebalancing an oversupplied market despite worries that demand will crumble. West Texas Intermediate futures, the U.S. oil benchmark, climbed 72 cents, or 1.3%, to $56.79 a barrel on the New York Mercantile Exchange. Prices have risen 25% for the year, though they are still 26% below their October multiyear highs. Brent crude, the global oil gauge, added 84 cents, or 1.3%, to $66.58 on London’s Intercontinental Exchange. Oil got its latest boost on signs that production curbs from the Organization of the Petroleum Exporting Countries and its allies will likely continue. Saudi Arabia, the de facto head of OPEC and the world’s largest exporter of crude, has shouldered the bulk of the cuts and committed to significantly reduce its exports.

Forex

The dollar edged lower intraday, after a weak employment report stoked concerns of slowing U.S. growth. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.1% at 90.21. The U.S. economy added just 20,000 jobs in February, far below economists’ expectations of 180,000 new jobs, data from the Labor Department showed Friday. The numbers boosted the case for the Federal Reserve to remain cautious on monetary policy, a headwind for the dollar, which becomes less attractive to yield-seeking investors when interest rates are expected to remain at current levels or fall. At the same time, weakness in other developed economies has given investors few reasons to buy currencies such as the euro. The European Central Bank said last week it planned fresh stimulus measures to kick-start the eurozone’s lackluster economy less than three months after phasing out a EUR2.6 trillion ($2.92 trillion) bond buying program. The euro was recently unchanged at $1.1231.

European Markets

Europe’s indexes finished in positive territory, led higher partly by banks, with investors also awaiting a scheduled U.K. parliamentary vote on Prime Minister Theresa May’s Brexit. Shares of Deutsche Bank and rival Commerzbank jumped after a report said that the two embattled German lenders were engaged in informal merger talks. The Stoxx Europe 600 added 0.8% to 373.47, after producing a weekly loss on Friday. The climb represented the pan-European index’s largest daily point and percentage gain since Feb. 15, according to Dow Jones Market Data. The U.K.’s FTSE 100, meanwhile, added 0.4% to 7,130.62, coming off its intrasession highs. Germany’s DAX advanced 0.8% to 11,543.48 and France’s CAC 40 climbed 0.7% to 5,265.96. Italy’s FTSE MIB index gained 0.8% to close at 20,638.22, while Spain’s IBEX 35 closed 0.5% higher at 9,171.90.

Asian Markets

There were broad gains in Asia. China’s indexes advanced following sharp declines at the end of last week. The Shenzhen A Share Index jumped 3.9% and Hong Kong’s Hang Seng rose 1%. Singapore’s shares edged lower to a fresh five week low. The Straits Times Index closed 0.1% down at 3191.42, though it clawed back a part of its earlier losses later in the session. Hong Kong’s Hang Seng Index recovered half of its Friday losses, finishing up 1% at 28503.30 on gains in Tencent and AIA. The internet giant and the pan-Asia insurer rose more than 2% each, accounting for nearly half of the index’s gain, while Chinese insurers helped the H-Share Index rally 1.1%. Sino Biopharma surged 5.9%, leading gains in blue chips, fueled by fellow drugmaker Fudan-Zhangjiang’s plan to list on mainland’s imminent innovation board. Meanwhile, hopes were lifted that a U.S. China trade could soon be reached after Beijing’s top central banker said Sunday that China had agreed not to devalue its currency to support its exporters. Indian shares tracked broad gains in regional markets to close at a near six-month high. The S&P BSE Sensex ended up 1% at 37,054.10, helped also by commodity and bank stocks. Indonesian shares ended in the red after a short lived rebound. The JSX index ended down 0.3% at 6366.434 with 240 losers and 165 gainers. Foreigners shaved their holdings by IDR559.30 billion, targeting Bank Mandiri, which fell 1.5%; Perusahaan Gas, which dropped 2.5%; and Bukit Asam, which lost 0.5%.

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