Global Market Report - June 26

Chinese shares entered a bear market today but European markets made modest gains

James Gard 26 June, 2018 | 11:05AM
Facebook Twitter LinkedIn

Asia

Markets in Asia Pacific fell again on Tuesday, but falls were modest relative to those in the United States, where the tech-focused Nasdaq lost 2%. Nevertheless, the Shanghai Composite Index, having dropped through 3,000 last week, entered bear market territory on Tuesday. It is now 20% off its January high and analysts expect further falls after breaching this technical level.

The trade picture is confusing to say the least: Treasury Secretary Steven Mnuchin yesterday said the US administration is not singling out China as a country for investment restrictions but “all countries … trying to steal our technology”. This choice of words precipitated the Nasdaq selloff but the administration since then has tried to soften the tone of the rhetoric.

A gain in the dollar against the yen helped insulate Japan from some of the wider regional falls. The Nikkei managed to scrape into positive territory to close at 22, 342 points and a retest of the 22,000 support level looks likely from here – the index breached 24,000 points in the early part of the year.

Europe

The UK’s FTSE 100 managed a modest recovery after yesterday’s slide. Shares in cruise operator Carnival (CCL) were the biggest risers on the index after recent results.

Shares in troubled retailer Carpetright (CPR) were off nearly 8% after the company made an annual loss, hit by restructuring and acquisition costs. The company recently entered a company voluntary arrangement (CVA) and the retailer is to shut stores and axe jobs.

European exchanges were higher this morning, helped by the euro dropping against the dollar.

North America

June’s US consumer confidence index is in view just after the stock market opens today. Durable goods orders for May will be released tomorrow.

Yesterday’s 300 point drop for the Dow Jones is unlikely to be repeated today, at least not at the open, according to futures markets.

Looking ahead, global sports brand Nike (NKE) releases earnings on Thursday, and the company has a strong track record of beating earnings forecasts. The company is rated as a three-star stock by Morningstar analysts, which means that it’s fairly valued.

 

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Carnival PLC1,838.50 GBX-2.57Rating
Nike Inc Class B76.76 USD-0.23Rating

About Author

James Gard

James Gard  is senior editor for Morningstar.co.uk

 

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures