Australian shares are set to recover from Tuesday’s heavy losses as overseas investors took a slightly less pessimistic view of China’s coronavirus outbreak and its economic fallout.
Market snapshot at 9:15am (AEDT):
- ASX SPI futures +0.5pc at 6,977, ASX 200 (Friday’s close) 6,995
- AUD: 67.61 US cents, 51.89 British pence, 61.34 Euro cents, 73.80 Japanese yen, $NZ1.033
- US: Dow Jones +0.7pc at 28,723, S&P 500 +1pc at 3,276, Nasdaq +1.4pc at 9,270
- Europe: FTSE 100 +0.9pc at 7,481, DAX +0.9pc at 13,324, CAC +1.1pc at 5,926, Euro Stoxx 50 +1.1pc at 3,719
- Commodities: Brent crude +1.2pc at $US60.02/barrel, spot gold flat at $US1,566.81/ounce
ASX futures were up 0.5 per cent at 6,977 — though the local market has some way to go before clawing back yesterday’s 1.4 per cent loss, its sharpest fall since the year began.
Wall Street rebounded (somewhat) from the previous day’s heavy sell-off, which saw the blue-chip Dow Jones index tumble by 450 points — its worst trading day in four months.
The Dow closed up 187 points, or 0.6 per cent, at 28,763.
The benchmark S&P 500 and tech-heavy Nasdaq lifted by 1 and 1.4 per cent respectively.
Pepperstone’s head of research Chris Weston does not think global markets have seen the last of their coronavirus jitters yet.
“It’s been a session where traders have focused less on the coronavirus (2019-nCov) and more on solid US economics,” he wrote in his morning note.
“I still sit in the camp that there is far more to play out in the 2019-nCov scare, and the impact on Chinese economics will be real.
“It’s the duration of the scare which will dictate confidence and the draw on discretionary spending, although most believe the authorities will meet any worsening of economics with a determined fiscal and monetary response.”
Earnings reporting season is gathering pace, with Apple reporting results for the last three months of 2019 after the US markets closed.
The result beat expectations, with revenues of $US91.8 billion up 9 per cent from the same period a year ago.
Investors were also pleased with a higher-than-expected forecast for revenue in the first quarter of 2020, sending Apple shares up more than 2 per cent in extended trading.
However, investors will continue to keep a close watch on Apple’s earnings amid concerns of a disruption to iPhone production as the coronavirus potentially spreads across major markets and production hubs in China.
Brent crude oil lifted to $US59.64 per barrel, while spot gold dropped sharply to $US1,568.87 an ounce.
The Australian dollar has remained weak at 67.62 US cents, having fallen by 1 per cent since the week started.
In economic news, the Bureau of Statistics will release its consumer price index (CPI) data for the December quarter at 11:30am (AEDT).
Reuters-polled economists are expecting inflation to have risen by 0.6 per cent during the quarter, which would take the annual rate to 1.7 per cent, still stuck well below the Reserve Bank’s 2-3 per cent CPI objective.