Australian market expected to open lower 28/08/19

Australian market expected to open lower 28/08/19

OPENING CALL: The Australian share market is expected to open lower. The SPI Futures is expected to be down 10 points.

 

BP PLC on Tuesday said it has agreed to sell all its interests and operations in Alaska to Hilcorp Energy Co. for $5.6 billion.

 

U.S. government bond yields resumed their march downward, as recent signs of stability in the stock market did little to arrest the relentless demand for longer-term debt securities.

 

Overnight Summary

 

 

Each Market in Focus

 

 

Broad gains helped Australian shares recoup some of Monday’s steep losses as markets across much of the region reacted cautiously to signals that the U.S. and China may yet move toward a trade deal.
The S&P/ASX 200 ended up 0.5% at 6471.2.
Technology stocks dominated with a 3.2% advance and the consumer discretionary subindex added 1.4%. Westpac was flat, but the other major banks were 0.4%-0.9% higher.
And while gold miners let go of some of the previous session’s safe-haven rally, Fortescue Metals retraced Monday’s drop with a 5.3% gain. 

U.S. stocks fell intraday as guarded investors hedged their bets on whether the U.S. and China are working toward de-escalating their trade spat.
All three major indexes fell into the red, slipping from their morning highs, as shares of banks, technology, industrial and energy companies relinquished their gains. Losses accelerated in afternoon trading as investors stepped up their buying of haven assets, like gold and U.S. Treasurys, which tend to be more durable during periods of economic turbulence.
The stock market’s struggle to extend Monday’s big gains underscored investors’ apprehension that the U.S. and China are working to avoid further escalations in trade tensions, analysts said. The more optimistic tone President Trump struck at the Group of Seven summit, suggesting the two global heavyweights are open to talks, helped fuel the Dow Jones Industrial Average’s roughly 270-point advance on Monday.

Gold futures climbed to their highest finish since 2013 and silver rallied to a more than two-year high on Tuesday, with losses in U.S. stocks and a drop in Treasury yields providing a boost to the precious metals as investors hopes for progress on U.S.-China trade talks faded.
Gold for December delivery on Comex rose $14.60, or 1%, to settle at $1,551.80 an ounce.
That was the highest finish for a most-active contract since April 2013, according to FactSet data. September silver added 51.2 cents, or 2.9%, at $18.153 an ounce. Prices settled at their highest for a most-active contract since April 2017, according to FactSet data.
In other commodity markets, September wheat prices were up 3/4 cent at $4.73 3/4 cents.

Oil futures rose, with U.S. prices up by more than 2%, buoyed by a report showing strong compliance with OPEC production cuts and expectations for a sizable weekly decline in U.S. crude supplies.
The Organization of the Petroleum Exporting Countries’ Joint Ministerial Monitoring Committee pegged July compliance with pledged output cuts at 159%, the highest monthly compliance rate so far this year. Meanwhile, a survey of analysts polled by S&P Global Platts showed expectations for a 4.7 million-barrel decline in last week’s U.S. crude stocks, ahead of government supply data due Wednesday.
Prospects for a deal to lift U.S. sanctions on Iran, which would add more barrels of oil to the market, also faded, contributing to oil’s rise.
West Texas Intermediate crude for October delivery rose $1.29, or 2.4%, to settle at $54.93 a barrel on the New York Mercantile Exchange. October Brent, the global benchmark, rose 81 cents, or 1.4%, to $59.51 a barrel on ICE Futures Europe.

The dollar edged lower overnight, led by declines against the Japanese yen and British pound even as the U.S. currency held ground against the euro.
After falling significantly in July, the pound later retraced a portion of its losses as investors bet that there’s still some chance that the U.K. can avoid a no-deal Brexit.
The WSJ Dollar Index was recently down nearly 0.3% at 91.24.

Stocks mostly rose, with the Stoxx Europe 600 adding 0.6% thanks to strong regional gains in Germany, Spain, and France.
The Stoxx Europe 600 Index closed up 2.34 points, or 0.63%, to 373.62.
The FTSE 100 closed down slightly, declining 0.08%. The U.K.’s blue-chip index lagged behind its European peers as increasing optimism over averting a no-deal Brexit pushed the pound higher.
The French CAC-40 Index was up 36.07 points, or 0.67%, to 5387.09 while the German DAX
was up 71.98 points, or 0.62%, to 11730.02.

Asian markets rose after U.S. President Donald Trump said China might resume trade talks with the U.S.
The Shanghai Composite was up 1.4% and Japan’s Nikkei climbed 1%.
Japanese stocks were led by gains in auto, retail and brokerage stocks as investors were soothed by seemingly conciliatory talk from both sides of the U.S.-China trade conflict. Among the top risers were Subaru, with a 4.9% gain, FamilyMart UNY Holdings with 1.9%, and Nomura Holdings up 1.8%. All 33 Topix subindexes — bar agriculture and insurance — ended higher, while the Nikkei rose 1.0% at 20456.08.
South Korea’s benchmark Kospi ended up 0.4% at 1924.60, snapping its three-session losing streak. News that the U.S. and China are resuming efforts to reach a trade deal boosted sentiment led the rebound, but gains were pared by offshore investors’ unloading local stocks in response to MSCI’s raising the weight of Chinese A-shares in its emerging market index, said a Shinhan Investment analyst. Most trade-sensitive stocks closed higher.
Hong Kong’s Hang Seng Index gave up early gains to close a tad lower as the outlook for local stocks remained downbeat. The benchmark closed 0.1% lower at 25664.07, despite signs of cooling trade tensions.
Malaysian shares closed at their lowest levels in two weeks as Southeast Asian equities broadly underperformed their rebounding Asian peers. The FTSE Bursa Malaysia KLCI Index closed 0.6% lower at 1590.84, with only five out of its 30 constituents finishing higher.
Singapore’s FTSE Straits Times Index closed flat at 3067.52, as trade relations between the U.S. and China remain uncertain. And Indian shares closed higher as investors reacted to an announcement by the Reserve Bank of India that it will pay $24 billion to the Indian government from its surplus reserves. The transfer will help the government’s finances amid a slowing economy.
The benchmark Sensex closed 0.4% higher at 37641.27, led by automobiles and banks.


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