Friday 16th November 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 14 points.

A late afternoon rebound in Australian equities pushed the benchmark back to positive territory at the day’s end.
U.S. stocks turned higher intraday, as technology shares attempted to stage a rebound and avert a sixth consecutive session of declines for the S&P 500.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

A late afternoon rebound in Australian equities pushed the benchmark back to positive territory at the day’s end. With a 12.6-point end of-session adjustment higher, the ASX 200 rose 3.2 points to 5736. The energy sector, after Wednesday’s drubbing, lost as much as 0.4% more despite an overnight uptick in crude prices. But after a roller-coaster day the segment rose 1%. Meanwhile, most other sectors finished little changed. Individually, machine-learning specialist Appen jumped 12% after raising 2018 guidance. And Australia’s dollar remains up some 0.5% versus other major currencies as a stronger-than-expected jobs report may cool predictions from some that it could be a while before the country’s own interest rates start rising.

NEW ZEALAND STOCKS:
Late gains in New Zealand — as Asia Pacific stocks generally improved during the last hour-plus — left the country’s benchmark barely lower on the day. The NZX 50 closed down 1.85 points at 8825.89 after earlier dropping as much as 0.7%. Air New Zealand rose 1.5% after not moving much in recent days despite oil’s price slump. Meanwhile, a2 Milk rebounded 1.3%. But production partner Synlait fell 1.2%. And though retirement-village operator Summerset dropped 1.5%, larger peer Ryman gained 1.3%.

US Markets

U.S. stocks turned higher intraday, as technology shares attempted to stage a rebound and avert a sixth consecutive session of declines for the S&P 500. The broad stock-market index added 0.7%, as a 1.9% jump in tech shares helped offset losses among shares of retailers. The Dow Jones Industrial Average rose 125 points, or 0.5%, to 25206, while the Nasdaq Composite climbed 1.2%. The session marked another volatile day on Wall Street with the Dow swinging more than 400 points from its high to its low by early afternoon, without a clear catalyst. Steep declines in oil prices, concerns around slowing growth in the technology sector and increasing doubts about the health of the world economy have rattled global markets this week. All three major U.S. indexes are on track to post declines of more than 2% for the week. Technology stocks were buoyed by Cisco Systems. Shares added 4% after the networking-equipment company reported its fourth consecutive quarter of growth, helping assuage recent market jitters over the health of the sector. Apple shares rose 1.8%, cutting its losses for the month to 13%.

Commodities

Gold prices ended higher, shaking off pressure from a stronger dollar to hold on to a week-to-date gain as U.S. and European equities declined.

IRON ORE: 71.38 – 0.18 (December contract)

Oil Futures

U.S. oil prices climbed, clawing back from the nearly one-year low it settled at in the previous session, even as data from the U.S. government showed that domestic-crude supplies rose more than expected for an eighth week in a row. Natural-gas futures, meanwhile, fell – on track to relinquish their gains from just a day earlier as a weekly rise in U.S. supplies of the fuel came in at nearly double the five-year average. December West Texas Intermediate crude rose 39 cents, or 0.7%, to $56.64 a barrel. It was trading at $56.87 shortly before the supply data.

Forex

The U.S. dollar edged lower intraday as the currency was caught between geopolitical crosscurrents. The WSJ Dollar Index, which measures the U.S. currency against 16 others, fell less than 0.1% to 90.57. The dollar was pushed lower by gains for currencies in oil exporting countries and other commodity producers, as the price of crude stabilized after 12 consecutive trading sessions of declines. The Russian ruble rose 1.4%, the South African rand climbed 1.2% and the Chilean peso advanced 1%. Those gains, and the broad rise in U.S. stocks, bolstered improving sentiment about the health of the global economy and the willingness of its members to engage in trade. The dollar was supported by a decline in the British pound, which fell 1.9% against the dollar, while also declining 2% against the euro and the Japanese yen, as U.K. Prime Minister Theresa May faces a threat to her leadership.

European Markets

European markets suffered broad losses, after the resignation of the U.K.’s Brexit secretary and other departures triggered massive uncertainty over the country’s plans to exit from the EU and the future of the government. Banks were the hardest-hit sector, followed by insurers, with oil majors helping to balance the day. The Stoxx Europe 600 closed down 1% to 358.14, bringing the week’s losses to 2%. The French CAC 40 shed 0.7% to 5,033.62, while Germany’s DAX 30 lost 0.5% to 11,353.67. The U.K.’s FTSE 100 finished flat at 7,038.01, with losses kept in check by a sharp tumble for the pound.

Asian Markets

In Asia, stocks were broadly higher outside Japan amid media reports that China made an opening bid to the U.S. on trade, as well as upbeat results in the technology sector. Risk appetite returned, with both equities and oil rallying, though crude’s bounce faded at the beginning of European trading. Still, what were broad — though generally modest — early declines in Asian stocks ended up being wide gains. Chinese benchmarks rose nearly 1.5% and Hong Kong indexes were up similarly following their 2018 underperformance. Korea’s Kospi finished up 1%. Shares of Tencent Holdings rose 5.7% after the Chinese tech giant reported a better-than-expected 30% rise in profits. Hong Kong’s Hang Seng rose 1.8%, the Shanghai Composite Index rose 1.4%. Japan’s Nikkei Stock Average was down 0.2% as the yen strengthened against the dollar. A stronger currency tends to pressure shares of multinationals who translate earnings from overseas.

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