Morning report

Morning News Summary

Tech Rally Sparks Life in Markets

Tech shares have burst the market back into life, with US tech stocks in particular shifting investor attention away from the recent developments in US and China trade tensions. The US, Europe, UK and Asia were all in the green.

US stocks sent into the green as tech stocks rally

US equities have turned up in afternoon trading, after early movements suggested recent struggles would extend. Driving the market was a tech rally, while trade war rhetoric continued to brew in the background. The S&P 500 (+0.5%) and Nasdaq Composite (+1.0%) were well in positive territory, while the Dow Jones Industrial Average struggled to push through, sitting flat at the time of writing.

Walt Disney (+1.3%) raised its offer to purchase most of 21st Century Fox to more than US$70bn in cash and stock, topping an unsolicited offer from Comcast (+2.2%). Fox shares soared +7.9% higher. Oracle shares sank -6.6% after an earnings beat was outweighed by weak guidance. That marked one of few losses in the tech sector, as other major players such as Netflix, Facebook, PayPal, Palo Alto Networks, Tesla, Alphabet, and Amazon rose by +3.0%, +2.9%, +2.2%, +2.1%, +1.7%, +1.5%, and +1.4% respectively. The S&P Dow Jones Indices announced that General Electric (-0.5%) will be replaced in the blue chip Dow Jones Industrial Average index by Walgreens Boots Alliance (+4.9%), after a two-year struggle for GE during which its share price has halved. Starbucks sank by -9.4% after announcing it will close more coffee shops in an increasingly crowded US market.

European and UK stocks bounce back after extended red stretch

European equities bounced back after a couple of down sessions with the Stoxx Europe 600 lifting up by +0.3%. Bank stocks benefited from the French-German agreement to further the integration of the Eurozone. Shares of Roche rose +2.5% to sit among the best performing European large cap stocks.

UK stocks rose with some consumer staples companies among the biggest gainers after the publication of a positive broker note, helping London’s FTSE 100 index to bounce +0.3% off a six-week low. The pound jumped after Theresa May won a crucial vote in parliament. Sky Plc jumped +3.1% after Disney upped its offer for Fox, which is bidding to takeover Sky. Oil stocks including BP (-1.1%) and Shell (-0.9%) were the biggest drag on the index ahead of the OPEC meeting on Friday. Housebuilder Berkeley Group slumped -5.9% after a profit warning, and peer Barratt Developments fell -1.5% in sympathy.

Asian markets in the green after a struggle to recover from Tuesday

Following Tuesday’s big sell-off Asian markets managed to end in the green for the day. The Kospi (+1.0%), Hang Seng (+0.8%), Topix (+0.5%) and Shanghai Composite (+0.3%) each rebounded.

The ASX 200 rose +1.2% as investors relaxed on the US-China situation.

Crude up, gold and iron ore down

WTI crude rose +1.1% to US$65.75 while gold fell -0.3% to US$1,270.81 and iron ore lost -US$1.70 to US$65.0/MT.

Today’s events

  • Stats NZ: Gross domestic product - March 2018 qtr
  • Ex final div: F&P Healthcare (12.5 cps)
  • SSM: GeoOp
  • AGM: NZME, Restaurant Brands, Z Energy
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This morning summary has been provided by Forsyth Barr Ltd and is for general information purposes only - your financial situation or goals have not been taken into account. If you would like more information or advice that is specific to you, talk to your Authorised Financial Adviser.