Traffic Exchange

Australian shares are set to open lower amid renewed concerns about the coronavirus outbreak.

ASX futures were down 13 points or 0.2% to 7097 near 5.15am AEDT, reversing an earlier modest advance. The currency tumbled 0.9%.

Shares on Wall Street were lower in afternoon trade, erasing some earlier modest gains.

Some traders pointed to a Global Times report that said a central Beijing hospital reported 36 new cases.

The report said those infected at in Xicheng district were eight medical workers, nine cleaning staff and 19 patients along with their families, leading many to fear a potential explosion in infection numbers in the capital.

“The story suggests that the virus has spread to medical workers and people who help clean hospitals, so the markets are shook up by that,” said , senior vice- at Cuttone & Co in New York.


Clickbank Marketing Tools

AFR interim profit season calendar: Today’s scheduled results: Ardent Leisure, Charter Hall Group, Inghams, Mayne Pharma, Orocobre, Platinum Investment Management, Village Roadshow

Today’s agenda

No local data

Overseas data: Japan CPI January, Nikkei manufacturing and services PMI for February; Euro zone Markit services PMI February; UK Markit manufacturing PMI February, Markit/CIPS services PMI February, Public sector borrowing January; US Markit manufacturing and services PMI February, Existing home sales January

Market highlights

ASX futures down 13 points or 0.2% to 7097 near 5.15am AEDT

  • AUD -0.9% to 66.18 US cents (Overnight low 66.10)
  • On Wall St near 1.20pm: Dow -0.7% S&P 500 -0.7% Nasdaq -1.1%
  • In New York: BHP -1.4% Rio -0.1% Atlassian -2.4%
  • In Europe: Stoxx 50 -1.1% FTSE -0.3% CAC -0.8% DAX -0.9%
  • Nikkei 225 futures -0.4% South Korea Kopsi futures -1.8%
  • Spot gold +0.3% to $US1617.04 /oz at 1.17pm New York
  • Brent crude +0.7% to $US59.55 a barrel
  • US oil +1.1% to $US53.85 a barrel
  • Iron ore +2.2% to $US92.01 a tonne
  • Dalian iron ore +4.2% to 667 yuan
  • LME aluminium -0.5% to $US1711 a tonne
  • LME copper -0.8% to $US5727 a tonne
  • 2-year yield: US 1.39% Australia 0.70%
  • 5-year yield: US 1.37% Australia 0.70%
  • 10-year yield: US 1.53% Australia 1.00% Germany -0.45%
  • 10-year US/Australia yield gap: 53 basis points

From today’s Financial Review

Revealed: Xero to head $100b ‘Aussie Nasdaq’: A new index tracking the best performing tech companies trading on the ASX will be launched on Friday, with Xero, Computershare and Afterpay leading the way.

Canticleer: Inside BCA president’s tech fund: Tim Reed wears two hats – president of the Business Council of Australia and co-head of private equity firm Potentia Capital. He tells how the fund works.

CSL bests Commonwealth Bank as market’s top dog: A $10,000 investment at CSL’s 1994 IPO would have returned $4.43 million today before dividends for investors willing to hold on to the market’s favoured blue-chip.

Fixing the slow economy is up to Canberra: The domestic private economy went backwards last year for the first time since the 2008-09 global financial crisis.

United States

The number of Americans filing for unemployment benefits rose modestly last week, suggesting sustained labor market strength that could help to support the economy amid risks from the coronavirus and weak business investment.

In a separate report on Thursday, the said its business conditions index jumped to a reading of 36.7 in February, the highest since February 2017, from 17.0 in January.

The survey’s measure of new orders received by factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware, soared to 33.6 this month from a reading of 18.2 in January. While a measure of factory employment slipped, manufacturers increased hours for workers.

Europe

European shares eased from record highs on Thursday, amid a raft of disappointing earnings and renewed coronovaris concerns.

The pan-European STOXX 600 shed 0.9%, deepening losses just before close to post their biggest one-day drop in three weeks.

A near 2% fall in insurance stocks led losses after Swiss Re posted a lower-than-expected annual profit. The reinsurer’s shares dropped 8.1% to a five-week low.

A slide in Spain’s Telefonica weighed on the Spanish index after the telecoms group said one-off charges in Mexico and Argentina hurt its annual profit. .

“Today is more of a bottom up day focused on results,” said Ingo Schachel, head of equity research at Commerzbank, Germany.

Paris’ main index fell 0.8% as luxury stocks, which derive a chunk of their demand from Chinese customers, fell after a spike in the number of coronavirus cases outside China.

LVMH, Kering and spirits maker Pernod Ricard slid between 2.2% and 3.5%.

Asia

China on Thursday reported a large drop in new virus cases. However, the number of infections in South Korea jumped, while Japan saw two deaths and researchers cautioned that the pathogen spreads more easily than previously believed.

Hong Kong stocks ticked lower on Thursday, as a rapid rise in new coronavirus cases outside mainland China outweighed optimism over Beijing’s widely-anticipated interest rate cut.

At the close of trade, the Hang Seng index was down 0.2% at 27,609.16. The rose 0.1%.

Steven Leung, at UOB Kay Hian, said that the 28,000 level presents technical resistance for the Hang Seng and predicts the index will trade in a tight range in the coming week.

Japanese stocks ended higher on Thursday as a rapidly weakening yen, which hit a near 10-month low versus the dollar overnight, lifted export-focused automakers, but the gains were capped by concerns over the impact of the coronavirus outbreak.

The benchmark Nikkei average ended up 0.3% at 23,479.15, while the broader Topix added 0.2% to 1674.48.

Currencies

The yen fell past 112 to a 10-month low against a broadly stronger US dollar on Thursday, extending recent losses for the Japanese currency as investors fretted about dire economic news out of the country.

Against the yen, the dollar rose 0.71% to 112.14, its highest since April. The yen, which benefits during geopolitical or financial stress as Japan is the worlds biggest creditor nation, has slipped about 2% over the last two sessions, its biggst two-day drop since September 2017.

“The JPY has slipped sharply this week and lost more ground overnight as its safe-haven appeal vanishes amid local virus worries,” Shaun Osborne, chief FX strategist at Scotiabank in Toronto said in a note.

A run of dismal economic news out of Japan has stirred talk the country is already in recession.

“The ties to China, exposure to the coronavirus, compounded by Japan’s own domestic challenges is bolstering fears that the world’s third-largest economy is likely contracting for the second consecutive quarter,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Against a basket of currencies, the dollar was 0.18% higher at 99.744, just shy of the 100 mark, a level not touched in nearly three years.

Commodities

Three-month copper on the London Metal Exchange (LME) fell 0.8% to $US5727 a tonne in final open-outcry trading after rising as much as 0.8% to $US5814.

“We’ve seen a lot of support coming from China’s central bank and government, but there’s worry about (the virus) spreading to other countries,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“Adding to this, we’ve seen the dollar move higher and a strong dollar in a world so loaded up on debt is a very bad cocktail for growth and demand.”

Copper has repeatedly failed to break through resistance around $US5800.

Global primary aluminium output rose to 5.451 million tonnes in January from a revised figure of 5.439 million tonnes in December, data showed.

LME aluminium shed 0.5% to $US1711 a tonne.

Surging prices for iron ore and precious metals boosted 2019 profits for Anglo American, outweighing weakness in diamonds and coal.

The London-listed miner has led rivals in a recovery from a 2015-16 commodities crash through operational improvements helped by new technologies, investing modestly in high return projects and exposure to a range of commodities.

BMO, Jefferies and RBC Capital Markets said Anglo remained their top pick among global miners.

Anglo declared a final dividend of 47 US cents a share, bringing total dividends for the year to $US1.09 per share versus $US1 paid out in 2018.

This was in line with its pledge to pay out 40% of underlying earnings.

Australian sharemarket

What we learnt from Thursday’s results: Iluka rolls, Coke fizzes, Boral delays

AFR interim profit season calendar

The local sharemarket closed at another record on Thursday with equities pushing higher on increased expectations of another rate cut from the Reserve Bank of Australia following soft employment numbers.

The S&P/ASX 200 Index closed the session 17.9 points, or 0.25 per cent, higher at 7162.5, topping the record close set on the prior day’s close.

The prospects of further montery easing put pressure on the alreadly-low Aussie dollar. The local currency fell to US66.3¢ following the employment data.

A boost for offshore earners but weight on importers, the Aussie continues to trade at its lowest level in more than a decade.

    Street Talk

    New Hope shareholder sells out after 30-plus years; JPMorgan on ticket

    Macquarie lending a hand on Boral’s internal review

    New fintech on-the-block Cheq closes fundraising

    Read More

    • Shares

      Unable to follow, try again

    • Bonds

      Unable to follow, try again

    Most Viewed In Markets

    Read More

    Please Login to Comment.