Australian market expected to open higher 31/01/20

Australian market expected to open higher 31/01/20

 

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open up 37 points.

 

Shares of companies with big presences in China continued their recent slide, though.  Starbucks, which has closed more than half of its stores in China, lost 2.1%, while Yum Brands, the parent company of fast-food chains KFC and Taco Bell, slipped 1.1%.  

  

In US data, the economy grew at a 2.1% annual pace in the December quarter, in line with forecasts. The inflation measure – core personal consumption deflator- rose by 1.3% over the year

 

Overnight Summary

 

 

Each Market in Focus

 

Australian shares dipped slightly, with the benchmark S&P/ASX 200 index ending down 0.3% at 7008.4.  

Health care stocks fell 1.4% and information-technology shares declined 1%, while financials gained about 0.4%. Nearmap skidded 30% to close at about A$1.70 after it downgraded its guidance.  

Shares in vintner Treasury Wine Estates gained about 5%, the second-best result in the index, regaining some losses after it tanked 26% on Wednesday.  

U.S. stocks edged lower intraday, weighed down by declines among shares of airlines, cruise operators and consumer companies whose profits are vulnerable to fallout from an intensifying coronavirus outbreak.  

The Dow Jones Industrial Average dropped 155 points, or 0.5%, to 28579. The S&P 500 fell 0.7%, and the Nasdaq Composite lost 0.7%.  

More than 7,700 people have been infected and 170 individuals have died from the new coronavirus since it was identified in December. The virus threatens to further slow down growth in China, the world’s second-largest economy, as officials restrict travel and companies close factories, cancel flights and take other steps to contain the virus’s spread.  

Thursday’s market declines were offset in part by rallying technology shares. Tesla jumped 11% after the electric-car maker exceeded Wall Street’s estimates for fourth-quarter adjusted profit and pledged to increase vehicle sales by more than a third this year.  

Microsoft gained 1.8% after the software maker said its cloud business helped drive profits, while sales climbed to a record, beating analysts’ expectations.  

 
The gold futures price rose by US$13.10 an ounce or 0.8% to US$1,583.50 an ounce. Spot gold was trading near US$1,575 an ounce in late US trade. Iron ore fell by US$2.60 or 3.0% to US$83.00 a tonne.
 

Oil futures fell, with prices poised to log their lowest settlement since October, as worries rise over the potential economic impact from the continued spread of the coronavirus.  

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, slipped Thursday to 90.81 from 90.88 on Wednesday.  

The pound climbed and U.K. equities deepened a slide on Thursday as the Bank of England opted to refrain from cutting interest rates.  

The pound rose as high as $1.3109 after the decision from $1.3021 on Wednesday.  NZD/USD was down about 3.6% year-to-date after slipping as low as 0.6482 in overnight trading and has a bias to fall further to 0.6430.

European shares sank as investors continued to fret about coronavirus in China. The Stoxx Europe 600 was down 1.1%, the FTSE 100 was off 1.4% and the CAC-40 and DAX fell 1.5%.  

Sterling strengthens 0.6% against the dollar after the Bank of England kept interest rates on hold.  

 

Hong Kong’s Hang Seng shed 2.6%, retreating for a second day after reopening following the Lunar New Year holidays. Electronics suppliers were hardest hit due to concerns over labor supply and manufacturing as Beijing extends the holiday break to cope with the outbreak of the coronavirus.  

So far, more than 7,700 people, mostly in China, have been infected and 170 individuals have died from the new coronavirus since it was identified in December. The quickly spreading virus is weighing on the economic outlook of China, Hong Kong and other countries, as global and domestic travel is curtailed and companies close factories, cancel flights and take other steps to contain the virus’s spread.  

Japanese shares closed lower, with the Nikkei Stock Average ending down 1.7% at 22977.75


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