Monday: 26th March 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 51 points.

The Australian share market is expected to open lower, following a plunge in industrial metals prices and a two per cent fall on Wall Street on Friday.

Wall Street tumbled on Friday with more than 1,000 points knocked off the Dow in two days as investors, increasingly nervous about a potential US trade war with China, shied away from risk ahead of the weekend and sought shelter from further losses.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower, following a plunge in industrial metals prices and a two per cent fall on Wall Street on Friday.
At 0700 AEDT on Monday, the Australian share price futures index was down 51 points, or 0.88 percent, at 5,743.
The Australian share market on Friday plunged to a six-week low, as trade war fears weighed on markets.
The benchmark S&P/ASX200 was down 116.5 points, or 1.96 per cent, at 5,820.7 points, while the broader All Ordinaries index was down 114.2 points, or 1.89 percent, at 5,929.0 points.
In economic news on Monday, the weekly CoreLogic capital city house prices is due out.

US Markets

Wall Street tumbled on Friday with more than 1,000 points knocked off the Dow in two days as investors, increasingly nervous about a potential US trade war with China, shied away from risk ahead of the weekend and sought shelter from further losses.
In a volatile session, the S&P 500 came within a hair of its 200-day moving average, a key technical level. The benchmark index also nudged closer to its February low, which marked a correction, ending 9.9 per cent lower than its Jan. 26 record.
“There is concern what the trade war could look like. Investors want to manage their risk. If it escalates rapidly, it could be a major headwind for the market,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
President Donald Trump’s plans for tariffs on up to $US60 billion ($US77.8 billion) in Chinese goods moved the world’s two largest economies closer to a trade war as China declared plans to levy duties on up to $US3 billion of US imports including fruit and wine even as it urged the United States to “pull back from the brink.”
The Dow Jones Industrial Average fell 424.69 points, or 1.77 per cent, to 23,533.2, the S&P 500 lost 55.43 points, or 2.10 per cent, to 2,588.26 after hitting an intraday low that was barely above its 200-day moving average of 2585.22.

Commodities

The spot price of gold in Sydney at 0700 AEDT was $US1,346.99 per fine ounce, from $US1,338.28 per fine ounce on Friday.
IRON ORE: $63.99 -2.92(April contract)

Oil Futures

Oil prices had their worst day in two weeks, retreating from a seven-week high as the White House announced new tariffs aimed at China, raising fears that curtailed trade could crimp global economic growth.

Forex

The dollar fell to its lowest level in nearly a year-and-a-half against the Japanese yen Friday, reflecting investor worries over growing trade tensions between the U.S. and China.
The dollar was recently down 0.5% against the yen to Yen104.73, its lowest level since November 2016.
President Donald Trump said Thursday the U.S. plans to levy tariffs on as much as $60 billion of imports from China and impose restrictions on technology transfers and acquisitions by Beijing. In response, China’s Commerce Ministry announced Friday that $3 billion in U.S. goods would be subject to higher tariffs and said it is preparing more actions.
Australian Dollar:
The Australian dollar is back where it finished the local session on Friday, managing to hold its ground despite falls in base metals prices and US stocks.
At 0635 AEDT on Monday, the local currency was worth 77.07 US cents, a touch down from 77.09 US cents on Friday.

European Markets

British stocks fell to a 15-month low on Friday on mounting fears of a global trade war .
The FTSE 100 ended the session 0.4 per cent lower at 6,921.94 points, clawing back some losses after hitting its lowest level since December 2016 in early trading.
On the mainland, other European stocks fell, with Germany’s Dax down 1.8 per cent, the French CAC 40 1.4 per cent lower and the Euro Stoxx index dropping 0.9 per cent.
Investor unease extended to the response from China, which urged the United States to “pull back from the brink”, and unveiled its own plans to impose tariffs on up to $3 billion of US imports.
Bank stocks and miners were the biggest drags as risk sentiment soured and the most trade-sensitive sectors suffered.
Some felt this was a long-overdue selloff in stock markets, which enjoyed an unusually robust 2017 but have run into obstacles since the start of last month.
“It could have been anything that caused it, it just happened to be trade,” said Daniel Lockyer, senior fund manager at Hawksmoor Investment Management.

Asian Markets

The rumblings of a global trade war also shook Asian shares..
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 4.5 per cent.
Shanghai shares were down 3.4 per cent, andJapan’s Nikkei dropped 4.5 per cent.
“The economic impact on both China and the US will be determined by what form the tariffs end up taking. The effects are likely to be felt more strongly in the US and will increase both consumer and producer prices,” wrote Hannah Anderson, global market strategist at J.P. Morgan Asset Management.
The S&P/NZX 50 index on Friday fell 85.46 points, or 0.99 per cent, to 8,515.36.

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