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Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed


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NASDAQ 100,HANG SENG INDEX, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 closed -0.49%, -0.38%, and +0.10% respectively
  • Rising geopolitical tensions and concerns about a faster pace of Fed tightening weighed on sentiment
  • Asia-Pacific markets look set to open mixed. Crude oil prices climbed to fresh 7-year highs

Nasdaq 100, Hang Seng Index, Crude Oil, Inflation, Asia-Pacific at the Open:

US markets ended broadly lower on Monday, but technology shares bucked the trend and finished mildly higher. Tesla (+1.83%), Nvidia (+1.33%) and Amazon (+1.22%) were among the best performers in the Nasdaq 100 index. Investors mulled heightened geopolitical tensions between Russia and Iran after US National Security Adviser Jake Sullivan said on Friday that an imminent invasion is possible. Crude oil prices surged to fresh 7-year highs as traders worried about supply disruption between Russia and the European Union if the situation deteriorate further.

Rising crude oil prices spurred inflation concerns and may urge the Fed to tighten monetary policy at an accelerated pace. Fed bank of St. Louis President James Bullard said on Monday that the central bank needs to “front-load” rate hikes to restore its credibility and contain inflation. “We’ve been surprised to the upside on inflation. There is a lot of inflation”, he said during a TV interview.

Recently, Fed officials have become more hawkish-biased after a much stronger-than-expected nonfarm payrolls report and inflation readings in January, which underscored a tight labor market and rising wage pressures. This may urge the central bank to consider a 50bps rate hike in March and even a move in between scheduled policy reviews. The prospect of a faster pace of rate hikes may continue to weigh on equity prices, especially the rate-sensitive technology and real estate sectors.

Top 10 Stocks Daily Performance in The Nasdaq 100

Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed

Source: Bloomberg, DailyFX

The PBOC is expected to roll over its medium-term loans maturing this week, but a second consecutive rate cut is unlikely, according to a Reuters poll. The central bank will likely issue 200 billion yuan of medium-term lending facility (MLF) loans on Tuesday, matching the amount maturing on Friday. Last month, the PBOC surprised market by cutting the rate on one-year MLF by 10bps to 2.85% from 2.95%, showing its easing stance.

Asia-Pacific markets look set to open on the back foot following a tepid US session. Futures in Japan, Australia, mainland China, Hong Kong, South Korea, Taiwan, Singapore, Thailand and Indonesia are in the red, whereas those in Malaysia and India are in the green.

Looking ahead, UK jobs report dominates the economic docket alongside Euro area GDP growth rate. Find out more from theDailyFX economic calendar.

Hong Kong’s Hang Seng Index (HSI) fell for a second day as investors mulled rising domestic Covid-19 cases and stricter social distancing measures. Economists foresee Hong Kong’s retail sales growth to drop to 0% in 2022 from 8.1% in 2021. Meanwhile, unemployment rate may rise to 4.9%.Exchange data showed that HKD 2.47 billion have fled from Hong Kong on Monday via stock connections, marking a 3rd consecutive session of net outflow (chart below). This suggests that mainland investors have turned bearish on Hong Kong stocks in the near term, rendering them vulnerable to a technical pullback.

Southbound Flow vs. Hang Seng Index

Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed

Source: Bloomberg, DailyFX

Nasdaq 100 IndexTechnical Analysis

The Nasdaq 100 index is trending lower within a “Descending Channel” as highlighted on the chart below. An immediate support level can be found at around 14,180 – the 61.8% Fibonacci extension. Failing to hold above this level would bring the next support level of 13,740 into focus. The MACD indicator is about to form a bearish crossover beneath the neutral midpoint, suggesting that the overall momentum remains weak.

Nasdaq 100 Index Daily Chart

Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed

Chart created with TradingView

Hang Seng Index Technical Analysis:

The Hang Seng Index (HSI) breached above a “Falling Wedge” pattern from the upside. Prices have reversed lower to test the upper trendline for support, holding above which may pave the way for further upside potential. An immediate resistance level can be found at around 24,900 – the 127.2% Fibonacci extension. Breaching above this level may expose the next resistance level of 25,600. The MACD indicator is trending higher above the neutral midpoint, underscoring bullish momentum.

Hang Seng Index – Daily Chart

Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed

Chart created with TradingView

ASX 200 Index Technical Analysis:

The ASX 200 index returned to the range-bound zone between 7,200 and 7,500, riding a strong technical upswing. Prices have pulled back to the floor of the range looking for immediate support. The MACD indicator formed a bullish crossover beneath the neutral midpoint, suggesting that a technical rebound is underway.

ASX 200 Index  Daily Chart

Nasdaq 100 Muted Amid Geopolitical and Growth Risks, APAC to Open Mixed

Chart created with TradingView

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

Margaret Yang, Strategist for DailyFX.com
15 February 2022

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    • Discover how the ASX 200 fared in September and its prospects for a rebound.   Source: Bloomberg   Indices ASX Inflation Interest rate S&P 500 Australia  Tony Sycamore | Market Analyst, Australia | Publication date: Thursday 28 September 2023 09:18 The ASX 200: a look at September's performance A tough September September has once again lived up to its reputation as the worst month of the year for the ASX 200, currently down 3.68% month to date (MTD) with one full trading session left to go. Mixed performance in 2023 The ASX 200's disappointing performance in September follows a losing month in August (-1.42%), which has conspired to see the ASX 200 trading flat on the year (excluding dividends). The Australian bourse has returned a meager 3.5% in 2023 if dividends are included. A return that seems incomprehensible after the ASX 200 leaped from the starting blocks, adding a rapid-fire 6.22% in January on optimism around the China reopening and hopes that the headwinds of rising interest rates and inflation encountered in 2022 were in the rearview mirror: most of which we now know were unfounded. ASX 200 vs. global indices The reopening in China faded soon after, and still, three-quarters of the way through the year remains elusive. Interest rates, particularly at the long end of the curve, have raced higher both domestically and abroad. The jury remains out as to whether central banks have tightened policy enough to bottle the inflation genie. Optimists may point out that the ASX 200 has outperformed in September relative to US indices, given that both the S&P 500 and the NASDAQ are down over 5% MTD. However, that would overlook the fact that an index with a similar makeup to Australia’s, the FTSE 100, with its large weighting of miners, financial, and energy stocks, is on track for a positive month and a positive quarter. ASX 200 sector analysis At a sector level, all 11 ASX sectors appear poised to close lower for the month. The interest-sensitive real estate and IT sectors have been the main casualties, currently down by -6.57% and -5.46% MTD respectively The healthcare sector, representing 10.06% of the index, has declined by -4.58% in September The materials sector, accounting for a substantial 23.8% weighting within the index, has fallen by -3.16% in September The financial sector, comprising 27.1% of the index, is down by -0.37% in September The energy sector, making up 6.3% of the index, has been the best-performing sector this month. However, despite the price of crude oil surging by over 13% in September, the ASX 200 energy sector is down by -0.17% MTD. ASX sector breakdown chart   Source: SPGlobal.com ASX technical analysis The ASX 200 has spent the bulk of this year trading sideways in a range, above year-to-date lows at 6900 and below year-to-date high at 7567, struck in early February. The sideways price action in 2023 appears corrective and follows an impulsive five-wave rally (Elliott Wave) from the October 2022 double low at 6411 to the 7567 high of February this year. With the ASX 200 trading towards the bottom of its range, combined with the S&P 500 cash reaching our 4250/00 pullback target, we turn tactically bullish on the ASX 200, looking for a return to range (7440) highs and possibly year-to-date highs (7567). Stops on the bullish view would be if the ASX 200 were to see a sustained close below 6900, aware that should support at 6900 give way, the risks are for a test of 6750 before the 2022 lows at 6400. ASX 200 daily chart   Source: TradingView   TradingView: the figures stated are as of September 28, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.         This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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