Wednesday 3rd July 2019

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open down 11 points.

Four of the five worst-performing S&P 500 stocks in the first half of the year were retailers. That is continuing so far in the second half of 2019.

Anheuser-Busch InBev’s Asia-Pacific unit is seeking to raise as much as $9.8 billion in what could be the biggest-ever listing of a food or drink company.

Overnight Summary

Market Quotes by TradingView

Each Market In Focus

Australian Market

A retreat in shares of Australia’s big banks after the Reserve Bank cut its benchmark
interest rate held back the local equities market.
The S&P/ASX 200 initially extended the day’s modest advance after the central bank
lowered the cash rate another 0.25 percentage point to a fresh all-time low of 1%, but
faltered as the major banks fell to settle up just 5.1 points at 6653.2.
Westpac fell 1.6%, Commonwealth Bank and ANZ each dropped 1.5%, and National Australia
Bank slipped 1.2%. The telecom sector was also in the red, with Speedcast sinking 41%
after resetting earnings expectations, but the materials subindex picked up 1.1% and
energy stocks gained 0.5% as most other sectors strengthened.

US Markets

U.S. stocks were flat intraday as optimism about the prospects of a trade deal between
the U.S. and China waned.
The S&P 500 fell 6 points, or 0.2% after reaching a high on Monday. The Dow Jones
Industrial Average slipped about 59 points, or 0.2%. The Nasdaq Composite fell about
Continued uncertainty surrounding trade after this weekend’s talks at the G-20 summit
tempered some of investors’ initial enthusiasm. For example, the U.S. said it may
introduce new levies on the European Union, depending on the outcome of a World Trade
Organization case over the EU’s subsidies of the airplane manufacturer Airbus.


Gold prices rallied, with the yellow metal recouping much of the hefty declines from a
day earlier, when it posted the sharpest single-session decline in more than a year.
Investors favored haven assets, such as gold, on the back of weakness in the U.S.
dollar and losses in the U.S. stock market.

Oil Futures

Oil futures slumped, more than erasing gains from a day earlier that followed word of
extended OPEC-led production cuts, with investors unable to shake demand worries tied to
a vulnerable global economy and trade negotiations.
Analysts said the expected production extension packed few surprises, failing to offset
the clouds forming on the demand side.
August West Texas Intermediate crude fell $2.84, or 4.8%, to settle at $56.25 a barrel
on the New York Mercantile Exchange. On Monday, prices settled 1.1% higher on
expectations that OPEC would extend its output-cut agreement. It announced the extension
after Nymex futures settled.
International benchmark September Brent finished at $62.40, down $2.66, or 4.1%, on ICE
Futures Europe.
Both crude benchmarks marked the lowest finish for a front-month contract since June
19, according to Dow Jones Market Data.


The U.S. dollar was modestly weaker intraday as investors were more optimistic about
global growth after the G-20 meeting in Osaka.
While the U.S. and China are still far from agreeing to terms on a trade deal that has
preoccupied investors since last year, the signs of a thaw between the two sides were
enough to support additional risk-taking. The dollar was about 0.2% lower against the
euro and the Japanese yen, while the WSJ Dollar Index declined 0.1% to a recent 89.88.
Earlier, Bank of England chief Mark Carney said the risk of a trade war threatened
global and domestic U.K. growth. The pound weakened against the U.S. dollar by 0.5% to

European Markets

The Stoxx Europe 600 rose 0.37%, or 1.42 points, to 389.29 as trade optimism helped
investors to shrug off fears about fresh U.S. tariffs on European goods.
The DAX was flat and the CAC 40 climbed 0.1% after most major Asian indices rose.

The FTSE 100 ended the day up 0.8%, with plumbing-and-heating products company
Ferguson topping the list of risers, closing 3.4% higher. A healthier insurance market
helped buoy stocks industry, which were also among the top risers. Hiscox is the sector’s
biggest riser, finishing up 2.2%, followed by Aviva which gained 2.1%.

Asian Markets

Hong Kong shares closed higher, supported by gains in technology and casino stocks.
The Hang Seng Index rose 1.2% to close at 28875.56. Among tech stocks, Sunny Optical
Technology gained 9.3% to HK$88.20 and AAC Technologies rose 7.1% to finish at HK$47.50,
mostly catching up with its peers in Asia that saw shares in the sector rise on Monday.
The Hong Kong market was closed Monday for a public holiday.
Singapore shares ended nearly unchanged as gains in index heavyweights Jardine
Strategic and Jardine Matheson nearly offset losses by banking and commodity stocks. The
FTSE Straits Times Index ended down 1.46 points at 3370.80.
Malaysia’s benchmark share index closed at its highest in nearly four months after a
choppy session as expectations for a potential pick-up in exports growth build. After a
choppy session, the Kuala Lumpur Composite Index closes 0.4% higher at 1,691. Market
breadth, however was slightly negative with losers edging out gainers by 450 to 440.
The Nikkei gave up most of its earlier gains, ending just 0.1% higher at 21754.27.
Gains were led by electronic stocks, with the precision instruments sector on Topix up
0.6%. Hitachi was up 3.2% while Tokyo Electron and Fujitsu were up 3% each.
South Korea’s stock benchmark ended lower, with automobile and tech shares leading the
pullback. The Kospi closed down 0.4% at 2122.02, its third consecutive losing streak.
Indian shares closed higher, gaining for the second consecutive day, as anticipation
builds ahead of the federal budget due Friday.
The BSE Sensex closed 0.3% higher at 39816.48 with gainers outnumbering losers 19 to 11
among its constituents.

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