S&P 500, Hang Seng Index, ASX 200 INDEX OUTLOOK:
- Dow Jones, S&P 500 and Nasdaq 100 closed +0.11%, +0.28%, and +0.38% respectively
- US inflation hit a four-decade excessive of seven.0% in December, largely according to expectations
- Asia-Pacific markets look set to open increased. Hong Kong shares might proceed to guide the good points
Nasdaq 100, Hang Seng Tech, US Inflation, China Inflation, Asia-Pacific on the Open:
Wall Street shares closed mildly increased on Wednesday, because the intently watched US inflation information didn’t ship a lot of a shock. In the prior day, Federal Reserve Chair Jerome Powell assured market individuals that the central financial institution will tighten coverage to comprise inflation with out hurting the financial system. This clear steering eliminated coverage uncertainties and allowed traders to focus extra on the upcoming earnings season.
The DXY US Dollar index plummeted 0.62% in a single day, falling to a two-month low of 95.00. This could also be attributed to unwinding actions as traders have beforehand priced-in not less than three fee hikes this yr. As the roadmap of tightening will get clear, some merchants might search for an exit and revenue taking alternatives. A tender US Dollar is usually optimistic to shares, commodities and Emerging Market belongings.
Top 10 Stocks by Market Cap within the Nasdaq 100
Source: Bloomberg, DailyFX
Hong Kong shares might proceed to rise on Thursday, led by the expertise sector. Hong Kong’s Hang Seng Index surged 2.8% and the expertise benchmark Hang Seng Tech Index soared almost 4.99% on Wednesday, suggesting that traders could also be shopping for the dips in anticipation of extra financial and stimulus assist. The inventory connections registered HK$ 5.29 billion of internet Southbound inflows on Wednesday, marking the best degree since October 2021. Wealth impact might encourage extra consumers to return to the market after months of promoting.
Another catalyst on Wednesday was the discharge of lower-than-expected inflation figures. December’s CPI and PPI got here in at 1.5% and 10.3% respectively, falling from November’s readings of two.3% and 12.9%. This will make it simpler for the PBOC to unfastened financial coverage in 2022 to spice up development because the nation fought arduous to take care of its zero-Covid coverage.
The Japanese authorities has prolonged strict border controls till the top of February amid a fast enhance in Covid-19 instances as a result of Omicron variant. This has weighed on market sentiment, particularly the tourism and journey sectors. The Nikkei 225 index stays in a consolidative temper ready for recent catalysts for a breakout.
China Inflation – Dec 2021
Source: Bloomberg, DailyFX
Looking forward, a number of Federal Reserve official speeches dominate the financial docket alongside US preliminary weekly jobless claims. Find out extra from theDailyFX financial calendar.
Asia-Pacific markets look set to open broadly increased on Thursday. Futures in mainland China, Australia, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, India and Thailand are within the inexperienced, whereas these in Japan are within the purple.
Looking again to Wednesday’s shut, 10 out of 11 S&P 500 sectors ended increased, with 57.6% of the index’s constituents closing within the inexperienced. Materials (+0.95%), client discretionary (+0.63%) and knowledge expertise (+0.44%) have been among the many finest performers, whereas healthcare (-0.26%) and financials (+0.04%) trailed behind.
S&P 500 Sector Performance 12-01-2022
Source: Bloomberg, DailyFX
Nasdaq 100 Index Technical Analysis
The Nasdaq 100 index rebounded from a key assist degree of 15,550 – the decrease certain of the range-bound zone it traded over the previous few months. An instant resistance degree will be discovered at 16,650 – the 200% Fibonacci extension. The shifting common traces are flattening, pointing to an absence of clear path. The MACD indicator is trending decrease, suggesting that downward momentum could also be prevailing.
Nasdaq 100Index – Daily Chart
Chart created with TradingView
Hang Seng Index Technical Analysis:
The Hang Seng Index (HSI) was buying and selling inside a “Falling Wedge” sample for the previous few months, as highlighted within the chart under. Prices are difficult the higher trendline of the wedge for a breakout. A profitable try might sign a bullish pattern reversal and open the door for additional good points.The MACD indicator is trending increased under the impartial midpoint, suggesting that bullish momentum could also be constructing.
Hang Seng Index – Daily Chart
Chart created with TradingView
ASX 200 Index Technical Analysis:
The ASX 200 index pulled again to a range-bound zone between 7,200 to 7,500 after a ‘false breakout’ final week. The flooring and ceiling of the vary could also be considered as instant assist and resistance ranges respectively. A significant breach above 7,500 might intensify shopping for stress and expose the subsequent resistance degree of seven,760.
ASX 200 Index – Daily Chart
Chart created with TradingView
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Comments part under or @margaretyjy on Twitter
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