Australian market expected to open lower 29/08/19

Australian market expected to open lower 29/08/19

OPENING CALL: The Australian share market is expected to open lower. The SPI Futures is expected to be down 9 points.

 

Fed Bank of Richmond President Tom Barkin said that while the U.S. economy looks strong, international growth has weakened and trade-related uncertainty is high.

 

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Overnight Summary

 

 

Each Market in Focus

 

 

Australian shares continued to claw back from Monday’s sharp retreat as gains by resources and technology companies outweighed weakness in the heavily-weighted banks and Telstra trading ex-dividend. Settling near the session’s high, the S&P/ASX 200 added 0.5% to 6500.6.
The mining subindex picks up 1.8%, helped by a 5.7% rally in Oz Minerals after it reports a sharp rebound in revenue early in 2H. Woodside lends to gains by the energy sector, gaining 1.6%, while Origin Energy is up 1.9%. National Australia Bank leads the banks lower with a drop of 1.3%, and telecom provider Telstra is 1.6% weaker. 

U.S. stocks climbed, lifted by gains in shares of everything from retailers to technology firms.
The Dow Jones Industrial Average rose 240 points, or 0.9%, to 26017. The S&P 500 added 0.6%, and the Nasdaq Composite climbed 0.4%, erasing earlier losses.
With no major U.S. economic reports scheduled for release and few fresh developments on the U.S.-China trade front, some traders said market moves were likely to be muted midweek.
Earnings drove some of the bigger moves within the stock market.
Hewlett Packard Enterprise jumped 3.8% after posting stronger-than-expected quarterly results late Tuesday.
Software-design firm Autodesk fell 7% after cutting its outlook for the year ahead.
Tiffany added 4.3% despite reporting a drop in sales for the second quarter, aided by earnings that came in better than analysts had feared.

Gold futures turned lower, after the sharp rally in the past month to the highest levels since 2013, discouraged some potential buyers who are now waiting for a dip or some consolidation in prices in order to invest, analysts said.
Gold for December delivery on Comex fell $2.70, or 0.2%, to settle at $1,549.10 an ounce after settling at $1,551.80 on Tuesday, the highest finish for a most-active contract since April 2013, according to FactSet data.
Gold had found some support earlier in the session as U.S. and European bond yields continued to slide, underlining fears of recession while the U.S.- China trade war remains unresolved and a no-deal Brexit looms for Europe.
September silver added 16.5 cents, or 0.9%, to $18.318 an ounce. The more actively-traded December silver contract added 15.8 cents, or 0.9%, to end at $18.456–the highest finish for a most-active contract since April 2017.
In other metals trade, October platinum rose 4.7% to $908.90 an ounce, with most-active contract prices settling above $900 for the first time since April.
September palladium retreated 1.2% to $1,460.80 an ounce, while the now most-active December futures contract lost 1.3% to $1,462.50.
September copper added 0.3% to $2.554 a pound. The most-active December contract settled at $2.5645, up 0.5%.

Oil futures posted a gain, after U.S. government data reported a weekly drop-in U.S.
crude supplies–the largest in five weeks–along with declines in petroleum products, which helped to ease concerns about a slowdown in demand.
West Texas Intermediate crude for October delivery, the U.S. benchmark, rose 85 cents, or 1.6%, to settle at $55.78 a barrel on the New York Mercantile Exchange. Prices settled at their highest in just over a week, but of the session’s high of $56.75, according to FactSet data. October Brent crude, the global benchmark, added 98 cents, or 1.7%, at $60.49 a barrel on ICE Futures Europe.
The Energy Information Administration on Wednesday reported that U.S. crude supplies fell by 10 million barrels for the week ended Aug. 23. That was the biggest one-week decline reported by the government agency since the 10.8 million-barrel fall for the week ended July 19.

The pound plummeted as British Prime Minister Boris Johnson set out plans to suspend Parliament, slashing MPs’ hopes of blocking a no-deal Brexit.
The move would see Parliament suspended for five weeks before returning on Oct. 14–less than three weeks before Britain’s scheduled departure from the EU on Oct. 31.
Sterling plunged 0.7% to $1.2201 and was the world’s worst-performing currency on Wednesday morning.
Johnson’s controversial move to prorogue Parliament, viewed as a bid to force through a no-deal Brexit, sent the pound plunging.
The government has asked the Queen to suspend Parliament from the week of Sept. 10.
Johnson’s political opponents blasted the timetable, which would limit MPs’ ability to block a no-deal Brexit.
Markets fear a no-deal Brexit, which the Bank of England’s worst-case scenario predicted would see sterling crash to parity with the U.S. dollar for the first time in its history.

The U.K.’s FTSE 100, benefitting from a weaker pound, rose 0.4%, among the few indexes in Europe to post gains for the day.
The Stoxx Europe 600 slipped 0.2%, pressured by declines among German and French shares.
The declines across European indexes came after Germany’s GfK consumer survey pointed to slowing consumption, adding to investors’ worries about Europe’s biggest economy.
German government bonds strengthened, with the yield on 10-year German bunds hovering near minus 0.718%. Yields, which fall as bond prices rise, have fallen to fresh record lows this year as optimism has soured over the prospect of a recovery in the eurozone economy.

Stocks in Shanghai and Shenzhen weakened amid conflicting reports on whether or not trade talks would be held between Washington and Beijing.
The Shanghai Composite dropped 0.3% while the Nikkei and Korean Kospi climbed 0.1% and 0.9% respectively.
While some Asian markets outside of China were still rebounding from recent large falls, China’s were more responsive to the latest news on trade talks, said Iris Pang, Greater China economist at ING Bank.
India’s benchmark S&P BSE Sensex closed 0.5% lower at 37451.84, weighed by financial and commodity stocks. Yes Bank led declines, slumping 7.5% after a ratings downgrade by Moody’s, while IndusInd Bank and Kotak Mahindra Bank each shed 1.5%. Mining and commodities were also broadly lower, with Vedanta down 4.1%, Tata Steel 4.0% lower and Oil & Natural Gas slipping 3.6%.
The FTSE Straits Times Index closes 0.4% lower at 3056.47 amid volatile global markets.
The benchmark is weighed by financials, with DBS Group and United Overseas Bank down 0.2% each and Oversea-Chinese Banking losing 0.7%. Index-heavyweight Singapore Telecommunications falls 1.6%.
Malaysian shares fall for the 3rd straight session, weighed mainly by financials as the earnings season draws to a close. The FTSE Bursa Malaysia KLCI Index settles 0.1% lower at 1589.82, taking its decline so far this year to 6%.
Hong Kong stocks end lower along with their mainland counterparts as sentiment remains subdued by ongoing trade tensions. The Hang Seng Index closes 0.2% lower at 25615.48 while the Shanghai Composite Index and the Shenzhen Composite Index are down 0.3% and 0.1%, respectively.


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