Global Market Report - April 30, 2018

Asia

Despite a timid close to the week from US indices, Asia-Pacific markets began on a more positive footing. Japanese markets were closed for a public holiday as part of Golden Week celebrations which continue at the end of the week. The Hong Kong stock market has been volatile of late, slumping when global tech stocks are out of favour, and rallying when market sentiment improves towards equities. The Hang Seng was up nearly 2% on Friday’s close and is now eyeing the 31,000 points resistance level, which the index last broke through in March. China’s manufacturing PMI was slightly better than expected at 51.4, which shows that the sector is still expanding at a modest rate.

Europe

The weekend’s bombshell news of Sainsbury’s (SBRY) and Asda merging is preoccupying the UK market. Brushing aside the obvious competition concerns, UK investors initially gave the idea a very positive reception, pushing Sainsbury’s up nearly 20% at the open. Analysts are closely watching the movement of shares in Asda parent company Walmart (WMT) at the US open, as the US retail giant is effectively offloading the UK budget supermarket. Britain’s biggest supermarket by market share Tesco (TSCO), which would be the obvious loser from a Sainsbury’s-Asda tie-up, was the biggest faller on the FTSE 100 on Monday morning. Nevertheless, its early slide moderated somewhat after a couple of hours trading and Tesco’s shares were off just 1%.

North America

Apple (AAPL) closes the earnings season for tech giants for this quarter with results on Tuesday. The company is expected to post $2.69 of earnings per share, according to Wall Street consensus, against a record $3.89 a share in the previous quarter. The company moved closer to becoming the first $1 trillion company in its last set of results. Still, at just over $162 a share currently, the company’s shares are off their recent highs above $170. Apple currently has a three-star rating from Morningstar, which means that it is fairly valued.