Good morning. That dip before the open missed my 6068 long order by 3 points before rallying to 6200 which was a little annoying, however the short from higher up managed a few points. Turned into quite a bullish day and overnight has been strong as well as Asian stocks surged, led by the the biggest gain in four years for Japanese shares, while emerging-market and commodity-producer currencies strengthened amid optimism China will be able to stabilize its financial markets. Its still all eyes on the Fed next week and possible rate rises in September (though more likely to be pushed back).
US & Asia Overnight from Bloomberg
Asian stocks rose, extending a global rally, amid optimism that Chinese policy makers will succeed in stabilizing mainland equity markets. Japanese shares rebounded to push the Nikkei 225 Stock Average back into positive territory for the year.
The MSCI Asia Pacific Index climbed 1.2 percent to 125.64 as of 9:03 a.m. in Tokyo as the Nikkei 225 surged 3.4 percent. U.S. investors returned from a long weekend to the first gains in mainland Chinese stocks for five trading days, with shares soaring in late afternoon trade in a pattern that’s associated with state buying. The Federal Reserve remains in focus, with traders counting down to next week’s meeting of the U.S. central bank.
“China seems to be the big driver at the moment,” Chris Weston, chief markets strategist in Melbourne at IG Ltd., said by phone. “As long as China is stable and equity markets there aren’t in freefall, markets will generally go higher. We won’t rule out more volatility ahead of the U.S. meeting next week.”
Japan’s broader Topix index added 3.3 percent. South Korea’s Kospi index advanced 1.4 percent. Australia’s S&P/ASX 200 Index climbed 0.5 percent and New Zealand’s NZX 50 Index rose 0.8 percent. Futures on Hong Kong’s Hang Seng Index climbed 1.1 percent in most recent trading. Markets in China and Hong Kong have yet to open.
China’s government spent $236 billion from June through August trying to shore up stocks, according to Goldman Sachs Group Inc. The Shanghai Composite Index surged 2.9 percent Tuesday, after losing 4.7 percent in the prior four days.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying U.S. equity benchmark index jumped 2.5 percent on Tuesday. [Bloomberg]
FTSE Outlook
Wednesday has seen a bullish Asian session, with the Nikkei up 6% at the time of writing, which has pulled the FTSE over 6200 and to the top of the 20 day Bianca at 6220. We have the top of the 10 day above this at 6277, with 6241 as resistance between them. If the bulls can break 6240 then we should see nearer 6300 later today. As mentioned on Monday I am bullish all this week and still expect to see 6400 or above unless something unforeseen happens. However there is still the risk of a dip down again with 5700 a possibility in October. That will be a good buying opportunity though (again). For today the pivot is at 6145 so support there though 6190ish above that looks decent support first thing.