Support 5869 5853 5833 5775
Resistance 5892 5900 5929 5965 5984 6000
Market Summary for Tuesday 16th February
The main event of the day was the meeting of oil ministers from Saudi Arabia, Russia, Qatar and Venezuela discussing oil output.
The FT100 rose as the meeting progressed in the morning on the hopes of a supply cut however fell back when only a freeze of output was on the cards.
This was still enough though to move markets higher and the FT100 closed up 0.65% on the day.
The best gainers were companies who consume oil products as the price of oil did not rise as much as expected if there had been proposed supply cuts.
So airlines did well and oil companies were still in the top 20 movers even though they had been higher earlier in the day.
US & Asia Overnight from Bloomberg
Asian stocks declined following a two-day rally, as energy shares tracked a slide in oil prices and a stronger yen weighed on Japanese shares.
The MSCI Asia Pacific Index lost 1.3 percent to 117.09 as of 1:42 p.m. in Tokyo. Global shares have rallied since Friday after more than $8 trillion was wiped from the value of equities this year amid concern growth in the world’s largest economies is weaker than forecast. Crude retreated amid bets that a pledge by the two biggest oil producing nations to freeze output won’t succeed in tackling the global surplus.
“Stay cautious,” Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion, said by phone. “Don’t be afraid to reduce risk because we expect things to be volatile from here — it’s a relatively defensive message. There are a lot of economic issues that need to be worked through. We’ve been incrementally paring back” risk positions, including equities, he said.
The Topix index lost 2.2 percent, wiping out an earlier gain of 1.1 percent. Japanese stocks are coming off the best two-day rally since 2008, including an 8 percent surge on Monday, amid speculation this year’s global selloff was overdone and as confidence grew that central banks will do whatever is necessary to support markets. The yen rose 0.4 percent to 113.68 per dollar after climbing 0.5 percent Tuesday as the agreement between Saudi Arabia and Russia weighed on oil prices, sending investors toward haven assets.
Australia’s S&P/ASX 200 Index slipped 0.7 percent and New Zealand’s S&P/NZX 50 Index advanced 0.2 percent. South Korea’s Kospi index fell 0.3 percent and Singapore’s Straits Times Index slipped 1 percent.
The Shanghai Composite Index fell 0.2 percent, erasing an earlier gain of 0.8 percent. Hong Kong’s Hang Seng Index lost 0.5 percent and the Hang Seng China Enterprises Index of mainland firms listed in the former British colony declined 0.8 percent. The biggest rally for China’s stocks in three months faded amid concern a record surge in bank lending is unsustainable and increases risks for the world’s second-biggest economy.
Both UBS Group AG and Bocom International Holdings Co. said China’s lending surge can’t continue, while Standard & Poor’s said the increase in debt relative to gross domestic product could pressure the country’s credit rating.
China weakened the yuan’s daily fixing by the most in more than a month. Yuan depreciation expectations will accelerate outflows this year, a researcher with the State Information Center wrote in the Shanghai Securities News.
Woodside Slumps
Woodside Petroleum Ltd., Australia’s second-largest oil and natural gas producer, declined 7.2 percent in Sydney after saying full-year profit declined 99 percent as the rout in energy prices forced the company to write down the value of its assets.
Saudi Arabia and Russia agreed to freeze oil output at near-record levels, the first coordinated move by the producers to counter a slump that has pummeled economies, markets and companies. Oil slipped below $30 a barrel after the accord was announced, signaling traders see no immediate end to the global supply glut.
“The rebound has fizzled in the absence of positive catalysts,” Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. “While the Russia and Saudi Arabia agreement to freeze production is slightly positive, it’s not going to ease the oversupply situation. Overall market sentiment is still pretty cautious. Investors are concerned the global economy is slowing down.”
Futures on the Standard & Poor’s 500 Index fell 0.2 percent after the underlying gauge rose 1.7 percent Monday, capping the best two-day gain in five months as the market caught up with a global rally following a holiday on Monday. Minutes of the Federal Reserve’s most recent meeting, where officials indicated they were monitoring the turmoil in markets, are due Wednesday.
SoftBank Group Corp. surged 9.9 percent in Tokyo, extending Tuesday’s 16 percent gain, after saying it’ll spend $4.4 billion buying back its shares.[Bloomberg]
FTSE 100 Outlook and Prediction
It looked like 5880 was going to stay as resistance yesterday and if it had done so then 5750 looked to be on the cards. Unfortunately the dip on the oil output news stopped at 5811 just missing the long order for the day, however the other trades came good, with 5877 being decent resistance for most of the day. Overnight has seen a rise to 5915 though since then its dropped off a bit and the 30min chart is on the cusp of turning bearish (isn’t yet though!). We have a large 22.4 point dividend today so bear that in mind if you are holding a position on a cash contract later on, and it also means we are likely to see some buyers come in around 16:10 this afternoon to chase prices a bit higher before the bell. Can be a good little long that one, but close before 16:29:59 so you avoid the actual divi. I have gone got an initial rise off the daily pivot at 5869 to start with (the in hours pivot is 5852 though) up to the 5900ish area before some more bears appear for a run down to possibly S1 (with a bounce for the divi at 16:00). There is quite a few news releases today but none of them marked as High Impact. I am expecting an early rise today, then a stall around the 5900 area.