Pre-Open Data
Key Data for the Week
- Thursday – EUR – Retail Sales rose 2.7% in March, up 12% year-on-year.
- Thursday – UK – Interest Rate Decision –Interest rates were kept stable at 0.1%.
- Friday – CHINA – Trade Balance
- Friday – US – Unemployment Rate
Australian Market
The Australian sharemarket fell for the first day this week on Thursday, down 0.5%. The losses follow a continued sell-off in the Information Technology sector, which closed 3.6% lower, as well as the reinstatement of COVID-19 restrictions for the Greater Sydney area.
Travel and leisure stocks slid following the resurgence of locally acquired COVID-19 cases in Sydney. Webjet shed 6.3% and Flight Centre lost 5.3%, while Regional Express Holdings fell 3.5% and Qantas slipped 1.5%.
Losses among buy-now-pay-later providers weighed on the Information Technology sector; Afterpay declined for a fifth consecutive day, down 7.0%, while Zip Co slid 5.9% and Sezzle fell 5.0%. Artificial intelligence company Appen tumbled 21.1% following an investor presentation which reported slow sales growth.
Materials and Energy were the only sectors to advance, up 0.8% and 0.2% respectively. Mining heavyweights outperformed following a continued rise in iron ore prices; BHP gained 2.1% and Rio Tinto lifted 1.0%, while Fortescue Metals rose 0.1%. Energy stocks were boosted by Oil Search which gained 1.3%, while Woodside Petroleum and Santos closed up 0.8% and 0.6% respectively.
Major banks were mixed; Commonwealth Bank and Westpac added 0.3% and 0.2% respectively, while ANZ fell 0.9% and NAB gave up 3.0% after the bank reported its half year results.
The Australian futures market points to a 0.28% rise today.
Overseas Markets
European sharemarkets were mixed overnight. Travel and leisure stocks were the weakest performers, with UK rail platform Trainline down 1.7% after it reported an annual loss. Renewable energy stocks also underperformed; Vestas Wind Systems gave up 6.6%, while Siemens Gamesa fell 4.4%.
By the close of trade, the STOXX Europe 600 eased 0.1%, while the German DAX and UK FTSE 100 gained 0.2% and 0.5% respectively.
US sharemarkets advanced on Thursday, with the Financials sector the strongest performer. Indian-based financial intermediary ICICI Bank lifted 2.2% and investment management company BlackRock added 1.9%, while financial services providers PayPal and MasterCard gained 1.9% and 1.7% respectively. Health Care was the weakest sector; Pfizer gave up 1.9% and Moderna fell 1.4% after US President Joe Biden backed plans to waive patents on COVID-19 vaccines.
By the close of trade, the NASDAQ lifted 0.4%, while the S&P 500 and Dow Jones added 0.8% and 0.9% respectively.
CNIS Perspective
The UK economy appears to be on track for a stronger economic recovery than previously expected, underpinned by the country’s comparatively quick COVID-19 vaccination rollout.
This is in sharp contrast to the UK’s economic downturn of 2020, which was more severe when compared to most other European economies, partly due to a slower move to implement strict lockdown measures.
The Bank of England (BoE) had previously forecast the world’s fifth largest economy would grow by 5% this year, following a near 10% contraction in 2020.
However, the BoE has now upgraded its 2021 growth outlook to 7.25%, which would be the largest annual growth rate since 1941.
The increase in the growth outlook reflects a smaller than feared hit from the third lockdown which began in January (expected to be lifted 21 June), as well as tax cuts and a lower than previously forecast unemployment rate.
Further, the BoE’s Monetary Policy Committee voted unanimously overnight to hold interest rates steady and maintain its quantitative easing program. This means the central bank’s main lending rate remains at an all-time low of 0.1% and its asset purchase program unchanged at £895 billion.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
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