Tuesday: 9th May 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 5 points.

The Australian share market is expected to open flat after the major US stock indexes erased earlier losses to end the session little changed.

Wall Street cut its losses to end little changed on Tuesday while energy stocks rallied after US President Donald Trump said the United States would quit the Iran nuclear deal, confirming what many investors had expected.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open flat after the major US stock indexes erased earlier losses to end the session little changed.
At 0700 AEST on Wednesday, the Australian share price futures index was up five points, or 0.08 per cent, at 6,082 points.
The benchmark S&P/ASX200 was up 7.4 points, or 0.12 per cent, at 6091.9 points, while the broader All Ordinaries index was up 7.6 points, or 0.12 per cent, higher at 6,183.2 points
In equities news on Wednesday, fertiliser and explosives maker Incitec Pivot releases its half year results.

US Markets

Wall Street cut its losses to end little changed on Tuesday while energy stocks rallied after US President Donald Trump said the United States would quit the Iran nuclear deal, confirming what many investors had expected.
In a televised speech, Trump said the United States would withdraw from a 2015 international agreement designed to deny Tehran the ability to build nuclear weapons, and also reinstate sanctions on Iran.
The S&P energy sector erased earlier losses to end the day up 0.78 per cent as oil prices reduced earlier declines on bets that the sanctions would disrupt global crude supplies.
The decision to leave the agreement with Iran is likely to raise the risk of conflict in the Middle East, upset America’s European allies and disrupt global oil supplies.
Trump said he is willing to negotiate a new deal with Iran.
The Dow Jones Industrial Average closed 2.89 points, or 0.01 per cent higher at 24,360.21, while the S&P 500 was down 0.71 points, or 0.03 per cent, at 2,671.92.
The Nasdaq Composite added 1.69 points, or 0.02 per cent, to 7,266.90.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,315.30 per fine ounce, from $US1,313.36 per fine ounce on Tuesday.
IRON ORE: $66.71 -0.17 (June contract)

Oil Futures

Oil prices recovered some losses, after U.S. President Donald Trump announced his decision to abandon the Iran nuclear deal.

Forex

The U.S. dollar rose after Federal Reserve Chairman Jerome Powell said the central bank’s efforts to restore monetary policy to pre-crisis norms is continuing.
The WSJ Dollar Index, which measures the currency against a basket of 16 others, gained 0.3% to 86.59, its highest closing level since Dec. 27. The currency jumped 0.5% against the euro to $1.1864. The greenback has rallied 5.4% against the unified currency after closing at a 52-week low on Feb. 1.
The Australian dollar is lower, after metals prices fell overnight and Wall Street put in a mixed performance.
At 0635 AEST on Wednesday, the local currency was worth 74.54 US cents, down from 75.10 US cents on Tuesday.

European Markets

Dealmaking dominated activity in UK stocks, with gains in Shire and Virgin Money, although the FTSE 100 index held steady after a public holiday and ended flat at 7,565.75 points.
A weaker pound had encouraged some earlier gains in the blue chip index, while midcaps closed 0.9 per cent higher and analysts at Accendo Markets said the market would remain supported by sterling’s relative weakness to the dollar.
Meanwhile, M&A activity prompted sizeable moves among individual stocks, with Shire the top FTSE gainer, up 4.6 per cent at 4,034.50 pence, after Japan’s Takeda agreed on Tuesday to buy the rare disease specialist for 45.3 billion pounds, raising the amount of cash in its bid to secure a recommendation.
Shire traded below the agreed 4,817 pence price, reflecting that the deal would only be completed next year, traders said.

Asian Markets

Asian shares are higher, helped by technology stocks as generally upbeat earnings overcame weakness in the global smartphone market and concerns about more regulation.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6 per cent, with information technology shares rising 1.3 per cent. Japan’s Nikkei was 0.2 per cent higher.
Some analysts cautioned that the rally in technology shares could face a short-term correction as valuations soar.
Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo, noted that technology shares have been moving higher, taking up a larger share of indices as more money flows into the exchange trade funds (ETF) market.
On Tuesday, New Zealand’s S&P/NZX 50 index rose 0.08 per cent, to 8,594.59.

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