Support 5960 5936 5895 5871
Resistance 5985 5993 6047 6050 6080 6169
Market Summary for Thursday 18th February 2016
Thursday was the end of a four-day winning streak, led lower by major mining stocks and hit by growing concern over the potential impact of Britain’s exit from the European Union. Additionally the FT100 went ex-dividend by about 21 points so this made the headline figure worse than it actually was. Many investors remain concerned about the impact on mining and energy shares of a slowdown in China and so there was some profit taking in those sectors after the recent rallies. The worst sector performers were commodities and banks with utilities and other safer sectors performing better.
US & Asia Overnight from Bloomberg
Asian stocks fell, paring the biggest weekly rally since December 2011, as the yen strengthened and a buildup in oil supplies dragged crude prices and energy producers lower.
The MSCI Asia Pacific Index declined 0.5 percent to 119.70 as of 9:07 a.m. in Tokyo. The gauge rose 6.5 percent over four days going into the final trading day of this week after sinking to a 3 1/2-year low last week amid concern about the growth outlook for the world’s largest economies and the rout in oil.
“Sentiment on the oil market has been a key macro driver for stock-market sentiment recently,” said Ric Spooner, Sydney-based chief market analyst at CMC Markets. “Concerns about the potential for credit-market problems in the event of a lower-for-longer oil scenario are near the top of a fairly long list of macro factors worrying investors at the moment.”
Even after this week’s gains, the MSCI Asia Pacific Index remains 9.2 percent lower this year. Since the start of January, a combination of tumbling oil prices, concern about the slowdown in Asia’s largest economy and a selloff in bank stocks sent a measure of global stocks into a bear market for the first time in five years.
The Topix index declined 1.2 percent after the yen rose 0.8 percent Thursday. A strengthening currency dents the earnings outlook for exporters. The benchmark gauge is up 8.3 percent for the week, the most since 2009. Tokyo shares rallied on optimism the Bank of Japan will step in with more monetary stimulus and speculation that a global selloff had gone too far.
South Korea’s Kospi index retreated 0.2 percent and Australia’s S&P/ASX 200 Index fell 0.4 percent. New Zealand’s S&P/NZX 50 Index added 0.2 percent.
Futures on the FTSE China A50 Index slid 0.6 percent, while contracts on the Hang Seng Index gained 0.2 percent and those on the Hang Seng China Enterprises Index rose 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index were little changed. Energy producers led losses on the U.S. equities gauge Thursday with investors betting on defensive equities less tied to economic growth, such as utility and telephone stocks. The gauge fell 0.5 percent after rising for three days.
West Texas Intermediate futures dropped 0.9 percent, trimming the week’s gain to 3.7 percent. Crude stockpiles rose by 2.15 million barrels to 504.1 million last week, according to the U.S. Energy Information Administration. Imports climbed 11 percent, the biggest increase since April. [Bloomberg]
FTSE 100 Outlook and Prediction
The end of a pretty bullish week thats seen a rise from 5500 in quite a short period, and has also seen us move into breakout territory at 5980. However, we have dipped back a bit from the 6020 level as the bulls weren’t able to hold above that yesterday and the 2 hour chart has gone bearish for the moment, with resistance at 6050. Todays pivot is at 5985 and whilst the 10min chart is currently bullish thus showing an initial rise to this area, I think we might see a dip back from that – recoil the spring possibly for another push upwards next week? The reason I am thinking a dip from the pivot is that the 30min has set up a bearish trend and looking at the coral has resistance from that at 5991 also. However, we will probably get a freaky Friday so its likely to do anything! We do have a quite clear 10min channel as you can see in the image, so its all eyes on the 5990 area really and to see what it does there. If the bulls push back above 6000 then a trip to 6050 is likely today, and if they can hold above 6000 then a bullish close for the week. However, a dip down to 5930 or even 5870 still looks viable. Case of trading off the key levels, keep the stops tight and be prepared for breakouts I think – 6050 and 5880 being the extremes of the range likely today.