Australian market expected to open higher 24/01/20

Australian market expected to open higher 24/01/20

 

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open down 21 points.

 

Former Wells Fargo CEO John Stumpf was barred from the banking industry and agreed to pay $17.5 million in a settlement with the Office of the Comptroller of the Currency.  

 

Xerox to Nominate 11 Candidates to Replace HP’s Board  – Xerox’s move comes as it pushes a $33 billion unsolicited takeover bid for the computer and printer maker.  

Overnight Summary

 

 

Each Market in Focus

 

Australia’s benchmark S&P/ASX 200 closed 0.6% lower as two of the country’s biggest construction companies both lost about one-fifth of their market caps.  

Cimic dropped 20% after flagging a A$1.8 billion writedown of its investment in a Middle East infrastructure contractor, while Downer shed 18% as it warned of project cost blowouts. Industrials was the worst-performing sector with a 1.8% decline, while energy lost 1.7%.  

Tech and property trusts were the only sectors not in the red. The S&P/ASX 200 closed at 7088.0.  

The Dow Jones Industrial Average recouped most of its losses intraday, but remained in the red as mixed earnings reports and a worsening viral outbreak unsettled investors.  

The blue-chip index was down 41 points, or 0.1%, to 29146 in recent trading, nearly recovering from a pullback of more than 200 points earlier in the session. Shares of Boeing rose for the first time in four trading sessions to help the Dow pare its decline.
 
At the same time, investors eased their buying of haven assets, including gold and U.S. Treasury bonds.  But falling shares of insurer Travelers and consumer-products giant Procter & Gamble held the Dow back from entering positive territory. Both reported mixed earnings results that sent shares of the companies lower.  

 
 
Gold futures marked their highest settlement in more than two weeks, as the spread of the coronavirus in Asia fed risk-off sentiment among traders, pressuring global stock markets and U.S. bond yields, and boosting haven demand for the precious metal.  
 
Against that backdrop, Gold for February delivery on Comex climbed by $8.70, or 0.6%, to settle at $1,565.40 an ounce. That was the highest most-active contract settlement since Jan. 7, according to FactSet data.  
 

Oil futures fell sharply, sending U.S. prices to their lowest settlement since late November, as the spread of coronavirus raised worries about the global economy and energy demand.  

March West Texas Intermediate oil fell $1.15, or 2%, to settle at $55.59 barrel on the New York Mercantile Exchange. That was the lowest front-month contract finish since Nov. 29, according to Dow Jones Market Data.  

The WSJ Dollar Index was recently up 0.13% at 90.52.  Earlier in the day, the Japanese yen gained against the dollar amidst risk aversion,
touching a two-week high on the back of coronavirus fears that are weighing on overall market sentiment again. China said it has expanded domestic travel restrictions to mitigate any risks of the disease spreading.  

 
European shares were a sea of red as fear about coronavirus outbreaks dominates market sentiment.  
 
The Stoxx Europe 600 fell 0.7%, the FTSE 100 was down 0.9%, the CAC-40 dropped 0.7% and the DAX was off 0.9%.  Miners and travel-related stocks were among the biggest European decliners as investors worry about the effect on trade and tourism.  
 
 
Chinese stocks logged their steepest declines in months after China barred travel from the city at the epicenter of a worsening viral outbreak, as investors grappled with the potential economic fallout of the disease.  The Shanghai Composite Index sank 2.8% in its biggest single-day drop since May 2019.

Hong Kong’s Hang Seng Index closed at a one-month low, down 1.5% at 27909.12, amid growing concerns over the outbreak of the new coronavirus. Investors are likely to watch for developments surrounding the virus amid the upcoming Lunar New Year holiday.  

The Nikkei Stock Average closed 1.0% lower at 23795.44, amid growing concerns over the coronavirus outbreak. 

The benchmark Kospi fell 0.9% to 2246.13. Investors took profit from Wednesday’s stock rally driven by corporate earnings.  


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