Australian market expected to open lower 21/08/19

Australian market expected to open lower 21/08/19

OPENING CALL: The Australian share market is expected to open lower. The SPI Futures is expected to be down 46 points.

 

Germany’s Bayer is selling its animal-health business to an American rival for $7.6 billion, part of the drug and chemicals giant’s plan to divest assets amid mounting legal liabilities from its Roundup herbicide.

 

Qualcomm has reached a new patent-licensing deal with LG Electronics, helping land its technology in a suite of wireless devices while U.S. federal regulators continue to scrutinize its business practices on antitrust grounds.

 

Overnight Summary

 

 

Each Market in Focus

 

 

Aussie stocks extended Monday’s strong gains into a second day, with energy stocks again taking the lead to help make the S&P/ASX 200 one of Asia Pacific’s best-performing indexes.
The benchmark index ended up 1.2% at the day’s high of 6545.0 — its strongest one-day rise in two months.
With crude prices again climbing overnight, the energy subindex gained 2.4%. Major banks were mixed after the prudential regulator confirmed coming changes to how capital is assigned to related businesses. Commonwealth Bank climbed 1.1% as ANZ fell 0.2%, while miner BHP edged up 0.1% after FY earnings missed expectations. 

Major U.S. stock indexes fell intraday and investors resumed their buying of less risky assets, putting the market’s recent recovery temporarily on hold.
Stocks, from banks to material firms to consumer staples, broadly fell, as investors remained edge over the U.S. and China’s trade conflict and how the Federal Reserve plans to proceed with monetary policy. The losses pressured the Dow Jones Industrial Average and the S&P 500 throughout the session, putting both indexes on track to post their first declines in four trading sessions.
No major catalysts precipitated the pullback, and some analysts described the trading session as a “pause” while investors awaited further meaningful developments on trade and the interest rates. At the same time, investors bought less risky assets, including bonds-pushing yields even lower-and other havens, such as gold.
The blue-chip index dropped 72 points, or 0.3%, to 26064 in recent trading, while the S&P 500 fell 0.4%. The Nasdaq Composite also declined, sliding 0.3%.

Gold futures climbed, with a slide in U.S. Treasury yields helping the haven metal recoup more than a third of what it lost a day earlier, when a rally in the U.S. stock market prompted some settling in bullion.
Gold for December delivery rose $4.10, or 0.3%, to settle at $1,515.70 an ounce, after the commodity gave up $12, or 0.8%, Monday. September silver picked up 20.8 cents, or 1.2%, to $17.148 an ounce, following a 1.1% loss a day earlier.
Gold has maintained its grip on the $1,500 an ounce level, which many technical analysts view as a bullish signal.
In other commodity markets, September wheat prices were down 5 1/2 cents at $4.60 cents.

U.S. oil prices are trading at the smallest discount to global prices in more than a year – a reversal that is crimping domestic exports and could lead to a buildup of crude.
Two new pipelines have started transporting oil from the prolific Permian Basin of West Texas and New Mexico to the Gulf of Mexico. That has eased a bottleneck, which has pushed the price of West Texas Intermediate – the U.S. price benchmark – closer to the global price of Brent crude oil. 
The difference between WTI and Brent fell to $3.53 a barrel Monday, its lowest level since July 2018, according to Dow Jones Market Data.
The gap was at $3.69 on the day as U.S. crude closed up 0.2% at $56.34 a barrel and Brent advanced 0.5% to $60.03.

The U.S. dollar early was higher versus the euro as investors eye renewed political turmoil in Italy, where the deputy prime minister called for snap elections a little more than a year into the current coalition government’s tenure.
The dollar and euro both gained against the British pound as Prime Minister Boris Johnson is seeking ways to extend talks with the European Union about the U.K.’s exit from the union. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.19% at 91.23.

European markets were a sea of red as the resignation of Italy’s Prime Minister sparked fresh political and economic uncertainty.
The pan-European Stoxx Europe 600 dropped 0.7%, while the FTSE 100 Index fell 0.9%, Germany’s DAX was down 0.5% and France’s CAC-40 reversed by 0.5%.

In Asia, major indexes were mostly positive or flat, though Hong Kong’s Hang Seng slipped 0.1% as recent political protests put pressure on the city’s government to enter talks.
Japan’s Nikkei gained 0.6% and the Korean Kospi jumped more than 1%. Japanese stocks were supported by hopes that central banks will respond to economic weakness amid the U.S.-China trade dispute. All 33 Topix subindexes, except utility and airline sectors, ended the day higher.
Gains were led by the so-called domestic demand stocks that are resilient to the ups and downs of economic cycles. Market participants are waiting for commentary from the Federal Reserve’s Jackson Hole gathering later this week. The Nikkei ended 0.6% higher at 20677.22.
South Korea’s benchmark Kospi closed up 1.1% at 1960.25, rising for a second-straight session. The rally was led by tech and chemicals stocks as risk appetite grew. Sentiment was buoyed by hopes that global trade tensions would ease thanks to the U.S.’s reprieve of Huawei sanctions and the possibility of more stimulus in China and Germany.
Hong Kong stocks finished the day lower, snapping three consecutive sessions of gains.
The benchmark Hang Seng index dropped 0.2% to 26231.54 as analysts cautioned that uncertainty remains high amid continued protests at home and trade fears abroad. The Kuala Lumpur Composite Index closed 0.4% higher at 1602.75, above a psychological mark of 1600, thanks to a better afternoon session on a blue-chip push.
Singapore’s benchmark FTSE Straits Times Index closed up 0.2% higher at 3135.95, lifted by property and conglomerate companies, as sentiment seemingly recovered slightly after last week’s glum 2Q GDP data heightened fears of a looming technical recession.

Meanwhile, India’s BSE Sensex closed a little lower, likely as investors seek to take some money away after three consecutive days of gains. The index ended 0.2% lower to close at 37328.01, with three losers for each share that gained.

 


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