Support 5924 5905 5902 5893 5850
Resistance 5960 5962 5993 6005 6050 6164
Market Summary for 24th February 2016
The FT100 fell quite heavily in the first hour of trading as prices of copper and crude oil slipped.
There was also some nervousness at the Wall Street open which saw 5850 being tested a few times with a close at 5867.
In after hours trading there has been a gradual recovery and currently around the 5925 level.
The main sectors to suffer were oil and commodities with housebuilders and gold to the upside.
There is still a flip-flop between economic driven sectors and non cyclic sectors and they seem to be oscillating on almost a daily basis.
US & Asia Overnight from Bloomberg
China’s stocks slumped by the most in a month after money-market rates jumped. The Aussie dollar fell on concern investment is weakening while oil resumed declines and gold advanced.
The MSCI Asia-Pacific Index of shares halted two days of losses, while China’s equities slid as concern grew recent gains were overdone relative to the outlook for the economy. U.S. crude slid back below $32 a barrel and copper extended a rebound. Japan’s Topix index snapped a two-day drop after reports the government may increase spending. The nation’s 40-year bond yield fall below 1 percent for the first time.
Crude’s gyrations and concern that China can’t regain momentum has dominated financial markets this year, spurring central banks to ponder further stimulus. Global equities have swung around over the past week, moving between gains and losses as investors tried to get a handle on the world economy’s prospects. U.S. Treasury Secretary Jacob Lew said Group of 20 finance ministers wouldn’t deliver an “emergency response” to the market turmoil at their meeting this week as we aren’t in a crisis environment.
“The new information that has been processed by the markets is the question of whether central banks are nearing the limit of their ability to soothe market fears and keep financial variables stable,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland.
Stocks
The MSCI Asia Pacific Index rose 0.1 percent as of 2:17 p.m. Tokyo time.
The Shanghai Composite Index dropped 3.9 percent and Hong Kong’s Hang Seng Index retreated 1.2 percent.
Agile Property Holdings Ltd. plunged the most in six months in Hong Kong after estimating a 70 percent drop in profits. A gauge of liquidity in the financial system jumped the most since Feb. 6, the day before the week-long Lunar New Year break began. The Kospi index in Seoul rose 0.1 percent, paring gains of as much as 0.8 percent.
The Topix jumped 2 percent. Construction companies and iron and steel producers drove gains after Asahi TV reported the government is considering an extra budget of about 5 trillion yen ($45 billion), citing unidentified ruling party officials.
Standard & Poor’s 500 Index futures were little changed, after the gauge reversed a slump of as much as 1.6 percent in the last hour of Wednesday trade, ending the session up 0.4 percent amid gains in commodity stocks and technology shares. The Nasdaq 100 Index added 0.9 percent.
Commodities
West Texas Intermediate crude declined 0.6 percent to $31.97 a barrel, after ending last session up 0.9 percent at $32.15 and reversing a slump of as much as 4.1 percent.
Stockpiles of gasoline in the U.S. fell 2.24 million barrels to 256.5 million, according to the Energy Information Administration, as demand climbed on pump prices near a seven-year low. American crude inventories, however, rose by 3.5 million barrels to an 86-year high of 507.6 million last week, according to the EIA.
Crude has slumped more than 13 percent this year on speculation a global glut in the commodity will persist amid the outlook for increased shipments from Iran and brimming U.S. supplies. Oil ministers from Iran and Saudi Arabia signaled Tuesday that they may not be willing to curtail production, which weighed on prices earlier in the session.
Gold climbed for a third day, advancing 0.4 percent to $1,233.57 an ounce, heading for its longest run of gains in more than two weeks.
Currencies
Australia’s dollar weakened 0.3 percent to 71.72 U.S. cents after a government report showed businesses’ annual investment plans fell to the lowest level in nine years.
The yen slid 0.3 percent to 112.51 per dollar, halting three days of gains, while the pound lingered above $1.39 after dropping to an almost seven-year low of $1.3879 on Wednesday amid concern regarding a planned referendum on whether the U.K. should remain in the European Union.
Bonds
Japan’s longer bonds surged after an auction of two-year notes drew a record-low yield of minus 0.183 percent. The yield on 40-year notes dropped below 1 percent for the first time and the rate on benchmark 10-year securities declined to an unprecedented minus 0.065 percent.
Treasuries advanced, with the 10-year yield declining by one basis point to 1.74 percent. [Bloomberg]
FTSE 100 Outlook and Prediction
We are waking up to news that China is off 5%, though the FTSE 100 has held up pretty well overnight despite this. We are just about to test the daily pivot at 5924 first thing, which may see a push up towards 5959 before some more downside to 5900. The FTSE 100 certainly recovered well yesterday from the dip down to 5850, adding just over 100 points as the algos and the US kicked in. Despite China being down I feel a bit more bullish today, maybe as they will probably expect more stimulus measures, and the 30min chart is showing a long at the 5905 area, as is the daily chart. It’s a risky long granted though! If 5900 area does hold then we could well get a rise towards 6000 again, otherwise 5850 (yesterdays low and the 10 day Bianca) is highly likely, and I will stand corrected and say that 5750 is still on the cards. If we don’t bounce from 5900 then it will make that recovery yesterday look like a stop hunt (which is distinctly possible). So, initially today the 10min chart is saying bearish, with resistance at 5945 and 5959, whilst the 30min is bullish, possibly for later on, with support at 5900. Could be a choppy day!