Morning report

Morning News Summary

Markets Green to Start Week

Global markets started the new week mostly in the green, with the US up as investors shifted focus back to corporate earnings, Europe shaking off early negative sentiment from German politics, the UK rising, and Asian markets mixed, albeit from a weak start.

US indices regained some lost ground

US stock-market indices followed global equities higher on Monday as investors appeared to shrug off worries about political uncertainty in Germany, returning their focus to corporate earnings and prospects for tax cuts. At the time of writing, the S&P 500 was up +0.1% while the Dow Jones Industrial Average added +0.4%. Leading the Dow Jones in gains, IBM grew by +1.5% and Cisco Systems rose by +1.0%. Alibaba shares increased by +1.9% after the company announced it would buy a 36% stake in Chinese big-box retailer Sun Art Retail Group (-4.1%). Following yesterday’s share price increase, Tesla retraced by -2.9% as investor sentiment over the company’s new semi-truck turned pessimistic. On the other side Merck & Co lost -2.2% and Bristol-Myers Squibb fell -1.7% after the release of positive news from Roche on competing lung cancer drugs. Also in healthcare, Allergan dropped -2.4% and Gilead Sciences and Celgene both declined -1.0%. General Electric slipped by -1.6%.

European and UK stocks closed higher

German equities recovered from early losses after talks to form a coalition government for the Eurozone’s largest economy collapsed, allowing the Stoxx Europe 600 to rise +0.5%. Roche jumped +5.9% after it outlined positive results from two major late-phase trials; one for haemophilia treatment in a broad patient group and the other for Tecentriq, a lung cancer therapy. The UK’s FTSE 100 added +0.1% as blue chip stocks closed slightly higher, aided by gains for home builders, but a rise in the pound put some pressure on exporters. Leading home builders in gains, Barratt Developments rose +1.0%. Retail companies Next (+1.7%) and Tesco (+1.3%) rose as the sector gears up for black Friday festivities. Shire Pharmaceuticals slid by -2.9% after the release of Roche’s positive haemophilia trial results.

Asian markets mixed

Asian markets followed the US market’s downward lead from Friday, although Chinese and Hong Kong equities made a sharp comeback as the day progressed. The Shanghai Composite (+0.3%) and Hang Seng (+0.2%) closed higher, while the Kospi and Topix ended lower by -0.3% and -0.2% respectively.

ASX 200 down

The ASX 200 lost -0.2%.

Crude and gold fell as iron ore rose

WTI crude fell -0.9% to US$56.07 while gold fell by -0.7% to US$1,285.48. Iron ore added +US$0.86 to US$63.47/MT.

Today’s events

  • 1H18 result: ARG, ARV, FPH, NPT
  • AGM: ATM, HBL
  • TWR (ex rights)

 

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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.