Global Fundamental Analysis 01/04/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 71 points up.

European banks are shoring up capital by canceling or delaying dividend payments amid concern about their ability to absorb a potential rush of bad loans as households and companies are impacted by the coronavirus pandemic.

The chairman of Huawei Technologies warned the U.S. to expect countermeasures from the Chinese government if it further restricts the technology giant’s access to suppliers, as the company’s profit last year grew at the slowest pace in three years.

Overnight Summary




Australian Market

Australian shares surged early before falling away to close 2.0% lower. The benchmark S&P/ASX 200 index jumped 3.3% after U.S. stocks continued to rally but
gave up all its gains with two hours of the session remaining. It eventually gave up 137.8 of the 339.0 points it accrued a day earlier to close at 5076.8.

The materials, healthcare, telecommunications and consumer staple sectors lost between 3.6% and 5.9% — the latter dragged down by Coles’ 9.9% decline after former owner Wesfarmers sold down its remaining stake.  The ASX 200 is 29% down on its Feb. 20 all-time high of 7162.5.


US Market

U.S. stocks are headed toward their worst quarter since the financial crisis, a stunning blow for the market that few investors could have anticipated at the start of
the year.
Markets were wobbly on the final day of the quarter. The Dow Jones Industrial Average fell 192 points, or 0.9%, to 22134, intraday while the S&P 500 slipped 0.9% and the
Nasdaq Composite lost 0.3%.

The relatively muted moves stood in contrast to the volatility over most of the past few months, which even veteran traders on Wall Street have described as being one of the most turbulent periods they could remember.



Gold futures ended sharply lower, pressured by better-than-expected U.S. consumer confidence data and a rise in Chinese manufacturing activity, but prices for the metal
posted gains for the month and quarter against the backdrop of concerns over the COVID-19 pandemic.

An index of consumer confidence fell to 120 in March, from a revised 132.6 in February, but some forecasts called for a fall to 115.  June gold on Comex lost $46.60, or 2.8%, to settle at $1,596.60 an ounce – the lowest finish in just over a week. The contract was up 1.6% from its finish at $1,571.80 on Feb.


Oil Futures

Oil prices rose, paring some of their slide from a day earlier but still recording their largest drop in any month ever as the coronavirus crisis dents fuel demand.
U.S. crude futures rose 1.9% to $20.48 a barrel on the New York Mercantile Exchange, a day after crashing to a fresh 18-year low. Prices ended down 54% for the month and 66% for the quarter, their largest monthly and quarterly drops ever, according to a Dow Jones Market Data analysis of figures going back to 1983.
Brent crude, the global gauge, edged down 0.1% to $22.74 a barrel on the Intercontinental Exchange.



The WSJ Dollar Index was down 0.10% to 93.71.


European Markets

European stocks gained as investors took heart from upbeat Chinese economic data, despite forecasts of a worse-than-expected U.S. recession.
The Stoxx Europe 600 gained 1.6%, the FTSE 100 advanced 1.9%, the CAC-40 was up 0.4% and the DAX climbed 1.2%. Goldman Sachs said the U.S. economy was likely to sink deeper into recession in the first half than it had expected.


Asian Markets

Japanese stocks ended lower, dragged by falls in auto and bank stocks, on persistent concerns about disruptions caused by the coronavirus pandemic.
Suzuki Motor lost 7.7%, Nissan Motor fell 7.4%, Mitsubishi UFJ Financial Group dropped 5.4% and Mizuho Financial Group shed 4.9%. The Nikkei Stock Average fell 0.9% at 18917.01, giving up gains made following a rebound in China’s manufacturing PMI in March.

South Korea’s Kospi Composite gained 1.5%. Hong Kong shares ended the session higher, as Chinese oil majors collectively bounced back, following a strong recovery in global crude prices. The benchmark Hang Seng Index gained 1.9% to close at 23603.48.

Singapore stocks ended higher, in line with major regional stock-market indexes. The Straits Times Index closed 2.7% higher at 2481.23. The market’s gains came after
Singapore’s central bank moved to stop the Singapore dollar from further appreciating against a basket of its trading partner currencies.

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Source - database | Page ID - 21628

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