Global Market Report - September 17

Chinese shares hit a near four-year low at the start of the new trading week, while the IMF is giving its assessment of the UK economy

Morningstar 19/09/2561

Global Market Report

Asia

China and Hong Kong indices resumed their slide at the start of the new trading week as relations between the US and China continued to be strained. President Trump is expected to sign off on $200 billion of tariffs this week, while China is refusing to negotiate “with a gun to its head”. Amid this fraught geopolitical backdrop, the Shanghai Composite Index closed at levels last seen since November 2014. Investors took notice when the index dropped through 3,000 points and it has struggled to regain these levels in recent months; 2,700 points seems to be a key technical resistance level in recent trading sessions.

Hong Kong’s Hang Seng dropped below 27,000 points on Monday morning, a loss of 1.3%, with tech bellwether and Hang Seng constituent Tencent (00700) falling over 3%.

India’s BSE Sensex also dropped 1% on Friday’s close but the index is still within touching distance of its record high just below 39,000 points.

Japan’s stock exchange was closed for a public holiday.

Europe

On the FTSE 100 this morning utility stocks were in the ascendant, with British Gas owner Centrica (CNA) leading the index. Burberry (BRBY) was an early faller. The luxury clothes company’s new creative director Riccardo Tisci makes his debut at London Fashion Week, which kicks off on Thursday.

Initially the FTSE 100 tracked Asian markets lower but a minor recovery brought the index back to flat levels in midmorning trading to hover around 7,300 points.

In the UK this week, inflation data for September is expected to show a slight dip in the rise in the cost of living.

An assessment of the UK economy is currently being given by IMF chief Christine Lagarde, who is warning that a “more disruptive departure” from the EU could have profound implications for growth.

Eurozone exchanges were similarly listless, with Germany and France drifting lower on Monday morning.

North America

Oracle (ORCL) will report earnings after the market closes on Monday. After the last quarterly results, in which Oracle failed to break out earnings from its cloud business, investors are expecting this element to be omitted this time too.

In terms of this week’s economics, August housing starts are due on Wednesday, weekless jobless figures are due on Thursday, and manufacturing/services PMI surveys are in view on Friday.

The Empire State manufacturing survey is due today.

Canadian inflation data for August is due on Friday, with the cost of living – as measured by the Consumer Price Index (CPI) – expected to have dropped from 3% to 2.8%.

 

 

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