Australian market expected to open lower 21/11/19

Australian market expected to open lower 21/11/19

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open down 10 points.

The Trump administration has allowed some U.S. suppliers to Huawei to resume shipping to the Chinese telecom giant, easing export restrictions while negotiators struggle to work out the first phase of a trade deal.  

U.S. Senate passed a bill in support of Hong Kong’s antigovernment protesters. The bill would require the U.S. Secretary of State to certify annually that Hong Kong remained sufficiently independent from Beijing to warrant the special status that has helped the city grow into a global financial hub

Overnight Summary



Each Market in Focus


Australia’s big banks weighed heavily on the equities market as another lender became embroiled in scandal. Ending near the session low, the S&P/ASX 200 dropped 1.4% to 6722.4–the sharpest one-day fall in more than a month and a half.  

The heavily weighted four biggest lenders were the main drag, led by a 3.3% fall in Westpac shares after the country’s financial-intelligence agency launched a civil suit seeking penalties for millions of alleged breaches of money-laundering laws.  

Each of the other industry sectors also lost ground aside from the
consumer-discretionary sector, thanks to 6.0% rally by Aristocrat Leisure with the release of its full-year earnings.  
Global stocks slumped as trade talks between the U.S. and China appeared to near an impasse, with President Trump threatening to raise tariffs further.
The Dow Jones Industrial Average dropped 230 points, or 0.8%, in midday trading. The S&P 500 shed 0.8%. The Nasdaq Composite lost about 1.1%, retreating from the record hit Tuesday. 

Losses deepened and major U.S. indexes fell near session lows after Reuters reported that the first phase of a trade deal between the U.S. and China may not materialize by year-end. Trade has been a key driver of market swings this year and the recent dash for stock records had been driven, in part, by optimism on a final deal.  
Gold prices gave up the bulk of their losses to finish just a dime lower, finding support after Reuters reported that phase one of a U.S.-China trade deal might not be reached this year. That lifted haven demand for the precious metal. 

Prices then moved even lower as minutes from the Federal Reserve’s October meeting, released after the gold price settlement, showed that Fed officials were more optimistic about the economic outlook and were against using negative rates in the next recession.  

December gold was at $1471.50 an ounce in electronic trading, following a settlement at $1,474.20, down a dime, or 0.01%, for the session.  
U.S. benchmark oil prices ended 3.4% higher at $57.11, recouping all of Tuesday’s 3.2% fall that left crude at a two-week low, as bullish investors were encouraged by a modest rise in U.S. crude-oil inventories.  

The dollar was modestly stronger as investors grow increasingly concerned about the prospects for a “phase one” trade deal between the U.S. and China.

Trade tensions tend to boost the dollar because the U.S. economy is seen as less vulnerable to a trade war than many other economies.  
The dollar was recently flat against the euro but up roughly 0.1% against the Japanese yen and 0.2% against the Swiss franc. The WSJ Dollar Index was up less than 0.1% at 90.83.  

Major indexes in Europe logged declines as investors grew concerned that relations between the world’s two biggest economies may be further strained after the U.S. Senate passed a bill in support of Hong Kong’s antigovernment protesters.  

The pan-continental Stoxx Europe 600 index fell 0.4%, led by declines in almost every sector. Germany’s DAX fell 0.5% while France’s CAC 40 slipped 0.3%.  

The Shanghai Composite Index ended the day down 0.8%. Investors are growing concerned that relations between the world’s two biggest economies may be further strained after the U.S. Senate passed a bill in support of Hong Kong’s antigovernment protesters.  

Hong Kong’s Hang Seng Index closed 0.8% lower at 26889.61. Blue-chip stocks including financials and developers were broadly lower, with index heavyweight AIA Group shedding 2.1%, China Life Insurance losing 1.4% and developer Country Garden Holdings falling 1.1%.

Banks mostly inched down after China’s benchmark lending rates dropped in November. Bank of Communications and Bank of China declined 0.8% and 0.6%, respectively.  

India’s BSE Sensex closed 0.5% higher at 40651.64, after hitting a fresh all-time high earlier in the session today. Sun Pharmaceutical Industries was the biggest gainer with a 5.7% rise, followed by IndusInd Bank, up 5.5%, while Yes Bank gained 2.7%.  

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