Global Market Report - September 26

Global investors are looking ahead to the Federal Reserve interest rate decision, while China shares were boosted by MSCI's plans to increase their index weighting

James Gard 26 September, 2018 | 11:04AM

Global Market Report

Asia

Markets in Asia-Pacific nudged higher on Wednesday despite mixed signals overnight from Wall Street, where the S&P 500 and Dow Jones retreated from records. News that index provider MSCI is planning to increase the weighting of Chinese equities in its indices helped the cause. FTSE Russell is also widely expected to include China shares for the first time in its benchmarks this week.

China’s CSI 300 rose over 1% on the day and the Shanghai Composite Index rose by a similar amount. Shanghai has been under pressure in recent weeks and months but today managed to climb above 2,800 points.

Japan’s Nikkei moved above 24,000 with a gain of nearly 100 points by the close. The index was last above this level in January this year and a push above 25,000 points would take it to 1991 levels. Unlike many developed country indices, the Nikkei is still some way off record high levels – the index hit 38,000 points in the late 1980s.

Europe

Eurozone markets were mixed, with France and Spain modestly higher but Germany lagging behind rivals. The FTSE 100 was virtually flat in midmorning trading as it clung on to the 7,500 points level.

Lower down the market, breakdown cover firm AA (AA) shedding 10% of its value as it blamed potholes and a cold winter for a drop in first-half profits.

In Germany, shares in car maker BMW (BMW) came under pressure again after yesterday’s profit warning, news that weakened the value or the automotive sector across Europe.

North America

Futures markets point to a rise in stocks at the open today.

The Federal Reserve is expected to raise interest rates by a quarter point, the third hike this year. After this week’s meeting, there are only two more meetings in 2018, in November and December.  Fed chair Jerome Powell speaks before the Senate on the US economy later on Thursday.

US consumer confidence was stronger than expected in yesterday’s reading, adding to recent data suggesting the economy is performing well.

Thursday sees a raft of data releases that will flesh out this idea, including the third reading of Q2 GDP, durable goods orders, the advance goods trade balance, as well as weekly jobless claims.

US retailer Bed Bath and Beyond (BBBY) reports earnings today after the market closes.

Canada’s GDP will be in focus on Friday with July figures in view. The Canadian economy is expected to have risen by 2.2% in July from the same month in 2017, a drop from the 2.4% gain in June.

 

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AA PLC49.54 GBX-1.02
Bayerische Motoren Werke AG66.77 EUR0.30
Bed Bath & Beyond Inc9.36 USD-5.45

About Author

James Gard  is content editor for Morningstar.co.uk

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