Global Market Report - December 5 2017

Global tech stocks weakened on Tuesday, while the FTSE 100 was higher as the softened and leading supermarkets rallied

Morningstar 06/12/2560

Asia

Markets in the region failed to react strongly to another record close for the Dow Jones on Monday following Senate approval for the tax reform bill. The most consistent theme globally, however, was weakness in technology sector shares. Hong Kong’s Hang Seng slumped 1%, dragged down by another fall in bellwether tech stock Tencent (00700). Newly listed Sunny Optical (2382), another technology stock, fell more than 5% on Tuesday.

Japan’s main indices diverged, with the price weighted Nikkei 225 dipping on Monday’s close, but the market cap-weighted Topix managed a modest gain on the day. A strengthening in the yen curtailed the Nikkei’s efforts to reclaim the 23,000 level.

In terms of economics, China’s Caixin services index in November was higher than the previous month, but equivalent Japan data were lower than in October.

Australian interest rates were left on hold as expected ahead of Tuesday’s GDP announcement – the economy is expected to have grown by 3% in the third quarter on an annualised basis.

Europe

A weakening in the pound on fading Brexit progress hopes helped nudge the FTSE 100 higher on Tuesday morning, while supermarkets were the biggest risers, led by Tesco (TSCO) with a near-4% gain after a broker upgrade. UK services data were weaker-than-expected and below the previous month’s reading of 55.6.

Eurozone retail sales contracted in October on the same month a year ago, having risen by nearly 1% in September, but the services sector expanded at a decent rate in November.

The global tech selloff also affected the eurozone’s listed shares in the sector, with Germany’s Dax, France’s CAC and Italy’s FTSE MIB all in the red approaching midday. 

North America

ISM services data for November are expected to show a healthy expansion, in keeping with recent readings on the US economy.

Canadian banking giant Bank of Montreal (BMO) continues the Canadian bank reporting season.

Looking ahead to this week’s key releases, a decision is expected on Canadian interest rates tomorrow. Friday sees the US non-farm payroll numbers: the country is expected to have added nearly 200,000 jobs in November. 

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