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UK Surges Ahead of Otherwise Flat Markets

Global markets were mostly flat or little changed, stalling after yesterday's strong rally in the US market. The only major market with any significant move was the UK, which surged after the UK's regulator gave emergency use approval for Pfizer's COVID-19 vaccine. The US, Europe and most of the Asia-Pacific markets edged lower or were flat.

US markets stall following November rallies

A day after the S&P 500 and Nasdaq reached record highs, equities pulled back a touch or stayed unchanged as the news flow dried up. Weaker than expected job creation in November and continued disagreement on additional stimulus might have weighed on sentiment. The S&P 500 added +0.1%, while the Dow Jones Industrial remained flat and the Nasdaq Composite edged -0.1% lower. The energy sector continued its recovery, with Halliburton up +5.1%. Salesforce.com slumped -7.5% after the company confirmed previously rumoured plans to acquire corporate messaging service provider Slack (-1.7%) for US$27.7bn, which represents a 55% premium to where Slack was trading before the rumour, bringing on a lot of debt and some growth concerns. Salesforce also reported third quarter results which mostly beat estimates but its outlook hinted at the company's slowest revenue growth since 2009. Microsoft, a Slack competitor, dipped -0.8%. Advanced Micro Devices rose +2.0% to trade record highs after announcing that Amazon Web Services has expanded its AMD-based offerings. Tesla lost -4.1% after CEO Musk told employees the stock will "immediately get crushed like a soufflé under a sledgehammer" if the company doesn't control costs . Pfizer climbed +3.5% after the UK granted emergency use approval to the company's vaccine.

Europe mixed as UK enjoys late surge

The Stoxx 600 closed -0.1% lower as gains in the UK offset losses in Germany, while France was flat. The FTSE 100 surged late in trade to close +1.3% higher as the pound weakened on signs the UK may not reach a trade agreement with the EU. Investors cheered news the British regulator approved Pfizer's COVID-19 vaccine. Pub owner Mitchells & Butlers and Cineworld surged +4.6% and +2.3% respectively on the vaccine news.

Asia-Pacific region mixed

Asian markets were mostly flat as US futures suggested a reversal in the US. The Hang Seng and Shanghai Composite fell -0.1% each, while the Nikkei 225 added +0.1% and the Kospi surged +1.6%, helped by semiconductor stocks.

The ASX 200 closed flat as gains in mining and energy stocks helped offset losses elsewhere. GDP data showed the economy expanded by +3.3% in the September quarter. The Reserve Bank Governor said wage and price pressures are unlikely to increase.

The NZX 50 was flat, with strong gains in small to mid cap components offsetting softer loses in the large caps such as F&P Healthcare (-1.6%) and a2 Milk (-1.3%).

Oil and gold up

WTI crude rose +2.2% to US$45.54/bbl. Gold added +0.5% to US$1,828.70/oz.

NZ Headlines

New Zealand Windfarms (NWF) expects to report EBITDAF of $5.7–6.3m in the year to 30 June 2021, down from $8.0m in 2020. The company issued the guidance after wrapping up an uptake deal.

At an investor day, NZX has (NZX) tightened its FY20 EBITDA guidance with an expectation of finishing in the upper half of its previously guided NZ$30m–NZ$33.5m range.

Summerset Group (SUM) said at its investor day that Australia is progressing well, with the first units expected to be delivered at the end of 2021.

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