Thursday: 28th June 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 11 points.

The Australian share market looks set to open in negative territory after White House economic adviser Larry Kudlow’s comments left investors uncertain over the trade relations between the US and China.

US stocks have fallen on renewed uncertainty regarding the US stance on Chinese investments in American technology companies, reversing gains earlier in the session.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open in negative territory after White House economic adviser Larry Kudlow’s comments left investors uncertain over the trade relations between the US and China.
At 0700 AEST on Thursday, the share price futures index was down 11 points, or 0.18 per cent, at 6,127.
In economic news on Thursday, the Australian Bureau of Statistics releases May jobs vacancies data.
No major equities news is expected.
The Australian market on Wednesday closed flat, with gains for energy and material stocks not doing enough to overcome losses elsewhere on the market.
The benchmark S&P/ASX200 index ended down 1.7 points, or 0.03 per cent, at 6,195.9 points, while the broader All Ordinaries was down 1.6 points, or 0.03 per cent, at 6,290.5 points.
Meanwhile, the Australian dollar is lower after the Trump administration’s comments sparked a US dollar rally.

US Markets

US stocks have fallen on renewed uncertainty regarding the US stance on Chinese investments in American technology companies, reversing gains earlier in the session.
At the market open, stocks rose as President Donald Trump said he will use a strengthened national security review panel — the Committee on Foreign Investment in the United States (CFIUS) — to deal with potential threats from Chinese acquisitions of US technology, instead of imposing China-specific restrictions.
The decision was seen by investors as a somewhat softer approach than plans reported earlier to block firms with at least 25 per cent Chinese ownership from buying US tech firms.
But later on Wednesday, White House economic adviser Larry Kudlow said in an interview on Fox Business Network that Trump’s announced plan did not indicate a softened stance on China.
The S&P 500 technology sector fell 1.5 per cent, weighing the most on the broader S&P 500 index. Chipmakers, which derive much of their revenue from China, fell even more. The Philadelphia semiconductor index slid 2.5 per cent.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,252.16 per fine ounce, from $US1,257.27 per fine ounce on Wednesday.
IRON ORE: $64.40 +0.11(July contract)

Oil Futures

Oil prices reached the highest level in more than three years, as threats to global supply loomed large even as major oil exporters increased production.

Forex

The dollar rose as investors reacted to news the White House may be easing its stance on restricting Chinese investment in the U.S.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.6% at 88.56. The euro was recently down 0.9% against the dollar at $1.1547.
The Trump administration has decided to rely on existing laws to restrict Chinese investment in the U.S., dropping consideration of alternative approaches that would have allowed the White House to impose stricter limits on its own.
The Australian dollar is lower against the greenback after a moderation in the Trump administration’s approach to Chinese investment spurred the US dollar to rally against most major currencies.
At 0635 AEST on Thursday, the Australian dollar was worth 73.41 US cents, down from 73.83 US cents on Wednesday.

European Markets

The UK’s top share index rebounded on Wednesday as fresh optimism regarding US trade policy fuelled risk appetite with the help of buoyant energy stocks.
The blue chip FTSE 100 index started the day in negative territory but closed up 1.1 per cent at 7,621.69 points.
Tensions over trade between the US and China have hit stock markets this week, with the FTSE sliding more than two per cent on Monday after President Trump announced plans to bar Chinese companies from investing in US technology firms.
A subsequent US decision to soften its tone and use strengthened security reviews rather than imposing China-specific restrictions was greeted with relief on Wall Street.

Asian Markets

Japan’s Nikkei share average dropped on Wednesday after higher oil prices hurt rubber products makers, airlines and shippers, while companies’ going ex-dividend added to the market’s broader weakness.
Yet the market came off early lows which traders suspected was linked to Bank of Japan’s buying of exchange-traded funds.
The benchmark Nikkei closed down 0.3 per cent at 22,271.77, while the broader Topix eked out tiny gains of 0.02 per cent to finish at 1,731.45.
Hong Kong stocks slid to nearly a seven-month low as a sharp fall in the yuan added to worries about China’s economic growth amid escalating US-China trade tensions.
The Hang Seng index fell 1.8 per cent, to 28,356.26, while the China Enterprises Index lost 2.2 per cent, to 10,879.17 points.
New Zealand’s S&P/NZX 50 index closed flat, up 0.07 per cent at 8,996.52.

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