Global Market Report - September 6

Asia markets came under pressure again, with Hong Kong's Hang Seng falling to levels last seen in August 2017

Morningstar 10/09/2561

Global Market Report

Asia

Markets in Asia were once again the target of selling from investors as trade war fears, a strong dollar, and an emerging market currency crisis proved a lethal cocktail.  While countries like Indonesia saw their stock markets recover slightly after Wednesday’s plunge, developed Asia markets like Hong Kong came under pressure: the Hang Seng dropped below 27,000 points with a 269 point drop, a fall of around 1% on the day. Hong Kong stocks are facing multiple threats at the moment, including China’s equity weakness and pressure on global technology stocks. Yesterday the Nasdaq was the biggest faller of the main US markets, losing over 1%, as the index retreats from its recent record highs.

China’s Shanghai Composite Index also dropped through a key technical level, 2,700 points, with a drop of around 0.5% on Wednesday’s closing level.

The US dollar continues to maintain its strength against the Japanese yen, a trend in evidence since March when the dollar bottomed out at 104 yen. In theory this should support Japanese equities, but the Nikkei 225 and Topix indices have proved sensitive to weaker sentiment on Asian stocks generally.

Europe

In the UK, the FTSE 250 saw some significant gainers on results, including transport group Go-Ahead Group (GOG) and housebuilder Bovis (BVS), which cheered shareholders with a rise in profits, revenues and dividends. The update from Bovis follows upbeat results from Barratt Developments (BDEV) and a mixed update from Berkeley Group (BKG) yesterday.

The FTSE 100 struggled at the start but managed to creep back into positive territory in midmorning trading. The Eurozone exchanges were mixed: France and Germany were higher but Spain was weaker on the day.

The Swiss economy appears to be in robust health, with GDP rising 3.4% year on year, a full percentage point above forecasts. The SMI index nudged higher and the Swiss franc firmed against the dollar, euro but barely moved against the British pound.

North America

ADP private payroll numbers today come ahead of tomorrow’s monthly non-farm payroll numbers, which are expected to show that the US economy added just shy of 200,000 jobs in August, up from just over 150,000 in July. The ISM services survey for August will also be in view.

Once again the US media is focused on politics more than economic data, with an explosive op-ed piece from an unnamed White House “insider” attracting considerable attention.

Among US companies reporting are Broadcom (AVGO) and Dell (DVMT).

 

 

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