Australian market expected to open higher 30/08/19

Australian market expected to open higher 30/08/19

OPENING CALL: The Australian share market is expected to open higher. The SPI Futures is expected to be up 47 points.


Investigators are looking into episodes in which Huawei was accused of stealing intellectual property from people and companies and how it recruited employees from competitors.


Saudi Aramco is considering a plan to split the world’s largest IPO into two stages, debuting a portion of its shares on the Saudi stock exchange later this year and following up with an international offering in 2020 or 2021.


Overnight Summary



Each Market in Focus




Australia’s S&P/ASX 200 index closed 0.1% higher at 6507.4, as a better-than-feared outlook for business investment offset a mixed response to more corporate earnings.
While 2Q investment fell by 0.5% on quarter, plant and machinery spending rose 2.5%, and that’s significant because it feeds into GDP growth. Also, firms were upbeat on investment plans for next year.
Woolworths rose 0.6% to A$36.38 as sales momentum continued into FY 2020, although its shares were outperformed by Coles, up 1.5% at A$13.62. Ramsay Health Care fell 0.6% to A$67.14 as its core EPS view was muddied by an accounting change.
Macquarie fell 0.8% to A$122.53 after trading resumed following its A$1 billion placement. 

U.S. stocks advanced intraday amid renewed hopes for progress in the trade dispute between the U.S. and China.
The Dow Jones Industrial Average climbed 372 points, or 1.4%. The S&P 500 added 1.5%, led by gains in trade-sensitive technology and industrial stocks. The technology-heavy Nasdaq Composite rose 1.7%.
Analysts and investors said the gains were driven in part by upbeat sentiment on the prospects for face-to-face talks between the world’s two biggest economies in Washington next month.
Stocks have had a turbulent August amid renewed anxieties surrounding trade, with all three major indexes down at least 1.7% this month. All three are still sitting within roughly 5% of their records. 

Gold futures fell to settle at their lowest in a week.
Sharp gains in the U.S. stock market, strength in the dollar and a move higher in bond yields dulled investment demand in the haven metal.
December gold lost $12.20, or 0.8%, to settle at $1,536.90 on Comex. That was the lowest most-active contract settlement since Aug. 22, according to FactSet data.
In other commodity markets, September wheat prices were down 2 1/2 cents at $4.69 3/4 cents.

U.S. benchmark oil prices ended the session up 1.7% at a two-week high of $56.71/bbl as declining U.S. oil inventories and a reinvigorated U.S. equities market improves overall risk appetite.

The dollar rose against a broad range of currencies as hopes of easing tensions in the trade battle with China stoked investor optimism.
The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, was recently up 0.2% at 91.60, a day after hitting its highest level in more than two years.
China’s Ministry of Commerce said that Beijing and Washington remain in “effective communication” about their continuing trade dispute, adding that the two sides are still discussing whether to proceed with talks previously scheduled for September. 

European stocks rallied, with the Stoxx Europe 600 closing 1% higher.
The FTSE 100 closed in the green as trade relations between the U.S. and China took a positive turn. The index ended the session up by 0.98%.
The German DAX was up 137.86 points, or 1.18%, to 11838.88 while the French CAC-40 Index was up 81.17 points, or 1.51%, to 5449.97.

China’s Commerce Ministry said the U.S. needed to create the necessary conditions for trade negotiations to proceed, while noting that the countries remained in communication over possible talks in September.
The comment from the Chinese government came too late to register in most Asian markets, with the exception of Hong Kong’s Hang Seng, which rallied from modest losses to rise 0.2% after the news from China. The Shanghai Composite was down 0.1% and Japan’s Nikkei dipped 0.1%.

The Nikkei Stock Average ended at 20460.93 as falls by Recruit Holdings and several electronics stocks weighed. Trading remained subdued as traders await further clarification over Brexit and U.S.-China trade issues.

South Korea’s benchmark Kospi closed 0.4% lower at 1933.41, snapping a two-session winning streak. The index initially opened higher on the government’s stimulus proposal but later turned lower after a high-profile court case rattled the country’s top conglomerate, Samsung Group. The Supreme Court sent back Samsung’s de-factor leader Lee Jae-Yong’s bribery case to a lower court for a review, paving the way for the business tycoon to get potentially heavier punishment.

Hong Kong’s Hang Seng Index ended 0.3% higher at 25703.50. Drugmakers led the rise as funds flowed into the defensive sector amid market uncertainties. Malaysia shares recovered from three consecutive days of losses, helped mainly by gains in plantation stocks. The FTSE Bursa Malaysia KLCI Index settled 0.3% higher at 1595.18.

Singapore shares rebound to close higher after China signaled its willingness to continue engaging with the U.S. on their trade dispute. Investors likely saw value in several blue-chip stocks after the Straits Times Index hit its lowest intraday level in 10 months earlier in the day. The benchmark closed 0.8% higher at 3081.83, with most of its constituents gaining.

And Indian shares fell for the second consecutive day as the market continues to parse the government’s fiscal stimulus announced last week. The benchmark BSE Sensex closed 1.0% lower at 37068.93, dragged by banks, as investors believe more needs to be done to support the economy. 

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