Australian shares are poised to edge higher at the open, after the World Health Organisation eased some concerns about the coronavirus outbreak.
ASX futures were up 9 points or 0.1% to 7038 about 5.15am AEDT. The currency slipped.
AFR interim profit season calendar: Today’s scheduled results: Baby Bunting
Global equities were lower though losses were checked after the WHO said cases of coronavirus are not rising dramatically outside China.
Mike Ryan, head of WHO’s health emergencies programme, said that the spike of some 14,000 cases in China reflected a change in approach to list patients in Hubei province whose infections were confirmed by chest imaging, not just those with lab-confirmed results.
“Crucially we understand that most of these cases relate to a period going back over days and weeks and are retrospectively reported as cases, sometimes back to the beginning of the outbreak itself,” he told a news conference at WHO headquarters.
“Outside cases on the Diamond Princess cruise ship we are not seeing dramatic increases in transmission outside China,” he said, referring to the cruise liner uarantined off a Japanese port.
No local data
Overseas data: Euro zone trade balance December, Fourth quarter GDP; US January import price index, retail sales, industrial production as well as December business inventories and UoM consumer sentiment February
ASX futures up 9 points or 0.1% to 7038 about 5.15am AEDT
- AUD -0.2% to 67.21 US cents
- On Wall St near 1.15pm: Dow -0.3% S&P 500 -0.1% Nasdaq -0.1%
- In New York: BHP -0.6% Rio -1% Atlassian +1% Tesla +4.3%
- In Europe: Stoxx 50 -0.2% FTSE -1.1% CAC -0.2% DAX flat
- Nikkei 225 futures -0.3%
- Spot gold +0.7% to $US1576.19 /oz at 1.17pm New York
- Brent crude +0.8% to $US56.24 a barrel
- US oil +0.5% to $US51.42 a barrel
- Iron ore +1% to $US88.56 a tonne
- Dalian iron ore +1.6% to 624.5 yuan
- LME aluminium +0.6% to $US1747.50 a tonne
- LME copper +0.5% to $US5790 a tonne
- 2-year yield: US 1.43% Australia 0.76%
- 5-year yield: US 1.43% Australia 0.76%
- 10-year yield: US 1.61% Australia 1.04% Germany -0.39%
- 10-year US/Australia yield gap: 57 basis points
From today’s Financial Review
Chanticleer: Why the ACCC shouldn’t appeal TPG case: It would be tempting for Rod Sims to appeal the TPG merger case to prove the ACCC is an effective regulator. But it would only add to its embarrassment.
Canberra Observed: Coal is Kryptonite across both major parties: While defending coal at all costs will have short-term political benefits in Queensland, those whose jobs depend on it are also owed some forward thinking.
Australian companies in China brace for first-quarter revenue hit: More than half the 100 companies surveyed by the Australian Chamber of Commerce in Shanghai expect a 20 per cent or more drop in first-quarter revenues.
Tesla seeks to tap into stock surge with $3b share sale: Elon Musk is taking advantage of an astronomical jump in the electric-car maker’s share price to bolster its finances.
Among stocks, Cisco Systems was the biggest drag on the three main US indexes, after the network gear maker’s lackluster revenue and profit forecasts.
NetApp fell about 10% as the data storage equipment maker’s current-quarter profit forecast fell short of expectations.
Kraft Heinz tumbled after it missed quarterly sales estimates and wrote down the value of some businesses, including coffee brand Maxwell House.
The US government on Thursday (Friday AEDT) filed a superseding indictment against the Chinese smartphone maker Huawei Technologies Co and its chief financial officer Wanzhou Meng.
The indictment was filed in the federal court in Brooklyn, New York.
European shares fell marginally for the first time in three sessions on Thursday.
Boris Johnson clears the decks for big-spending budget: A cabinet shake up saw fiscal hawk Sajid Javid axed as chancellor in favour of the more pliable Boris ally Rishi Sunak.
London’s blue chip index significantly underperformed, down 1.1% as a rallying pound hit its internationally exposed companies, while utility Centrica plunged 15% on reporting a 35% drop in 2019 profit.
After trading lower in the session the pan-European STOXX 600 index finished flat.
Auto stocks slid 0.8% after data showed auto sales in China likely fell 18% in January, their 19th straight month of decline, with the virus outbreak further hurting demand.
Nestle, the biggest firm on the STOXX 600 by market capitalisation, dropped 2.2% after it pushed back its 2020 growth target to over the next two years.
Among bright spots were German shares of industrial gases group Linde which rose 3.2% after it said it aims for further profit gain in 2020. Its rise helped Germany’s China-sensitive DAX wipe most of the session’s losses.
HSBC lowered its first-quarter forecast for mainland China’s economic growth to 4.1% year-on-year from 5.8% due to the fallout from coronavirus.
The bank also cut its China full-year growth forecast to 5.3% from 5.8%, adding the impact was already starting to be felt in tourism, trade, supply chains and elsewhere.
At the close of trade in Hong Kong on Thursday, the Hang Seng index was down 0.3% at 27,730, off its highest level since January 24 hit earlier in the session. The Hang Seng China Enterprises index fell 0.5%.
Hong Kong stocks could fall in the short term as the recent rally runs out of steam and amid uncertainty in Chinese economic growth, brokerage Guodu Hong Kong said in a note.
China’s main Shanghai Composite index and the blue-chip CSI300 index snapped a seven-day winning streak.
The Shanghai Composite index ended 0.7% lower at 2906.07. The blue-chip CSI300 index was down 0.6%. CSI300’s financial sector sub-index was lower by 0.7%, the consumer staples sector fell 0.6% and the healthcare sub-index lost 1%.
The smaller Shenzhen index fell 0.8% and the start-up board ChiNext Composite index was weaker by nearly 1%.
In Japan the benchmark Nikkei average slipped 0.14% to 23,827.73, while the broader Topix fell 0.34% to 1713.08.
Nikkei’s heavyweight SoftBank Group retreated 5.1%, after a 11.9% surge on Wednesday in response to a US judge’s approval of a takeover of its unit Sprint by T-Mobile.
The tech conglomerate’s third-quarter operating profit fell 99%, pulled down by losses at the $US100 billion Vision Fund, but its founder and chief executive officer Masayoshi Son said the company’s performance was already improving.
Big investors who are critical to SBG’s plans for a second massive tech investment fund are refusing to take part unless the first Vision Fund can turn around its performance, Reuters reported on Thursday citing sources.
Traders pay to hedge against deeper-than-expected Fed easing: A flurry of trades in eurodollar options point to Jerome Powell and his colleagues cutting US interest rates far more than currently being priced.
Copper and other industrial metals prices rose on Thursday.
Benchmark copper on the London Metal Exchange (LME) ended 0.5% higher to $US5790 a tonne. Prices are down nearly 10% from four weeks ago, but have recovered somewhat from a low of $US5523 on February 3.
Capital Economics analyst Kieran Clancy said focus was now moving from the effect of coronavirus on metals demand to the risk that measures to control its spread would disrupt production – something that could support prices.
China is the world’s biggest metals producer and consumer.
LME aluminium rose 0.6% to $US1747.50 a tonne.
China’s imports of crude oil and iron ore so far in February are running at levels well below the preceding months, and also from the same month last year, according to vessel-tracking and port data compiled by Refinitiv.
To be clear, what the numbers show is that the rate of discharge of cargoes is considerably slower, while the queue of vessels waiting to offload at Chinese ports seems to be longer than usual.
In other words, this doesn’t necessarily mean that China’s imports of crude and iron ore are plummeting, what it does mean is that the ports seem to be struggling to get back to normal volumes of cargo movements.
Australian shares closed marginally higher on Thursday.
The S&P/ASX 200 Index ended the session 15 points, or 0.21 per cent, higher at 7103.2, just short of its record high set toward the end of last month.