Support 5969 5956 5909 5895 5854
Resistance 5996 6043 6044 6078 6181
Market Summary for Friday 19th February
The FT100 fell back slightly on profit taking and also a reaction to a fall in oil prices which was triggered by a record build in U.S. crude inventories.
Also there was some caution ahead of the EU summit where the UK’s membership terms were being renegotiated.
The pattern was of a slow slide down during the day but this was minor compared to the gains of the week.
Some buying came in as the market came to a close (on the EU summit news) which helped the FT100 close down 0.36% for the day.
US & Asia Overnight from Bloomberg
Asian stocks rose, reversing earlier losses as a weaker yen buoyed Japanese equities and oil rebounded above $30 a barrel, lifting energy shares.
The MSCI Asia Pacific Index advanced 0.6 percent to 120.25 as of 1:44 p.m. in Tokyo after jumping 5.9 percent last week. Consumer-staple and industrial shares led gains all but one of the measure’s 10 industry groups — utilities — rose on Monday. The regional benchmark index remains 8.9 percent lower this year as 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.
“People are willing to take risk again,” said Karl Goody, who helps oversee about A$10 billion ($7.2 billion) as a private wealth manager at Shaw and Partners Ltd. in Sydney. “People are looking at the selloff this year and saying: enough is enough, there’s been enough pain now.”
HSBC Holdings Plc, Europe’s largest bank, reported a surprise fourth-quarter pretax loss of $858 million during the lunch break in Hong Kong trading. The shares rose 1.5 percent higher before the break.
Japan’s Topix index rose 0.5 percent, reversing losses of as much as 1 percent. The yen fell 0.2 percent to 112.86 per dollar after climbing 0.6 percent last week for its third straight weekly advance.
Australia’s S&P/ASX 200 Index added 1 percent. Brambles Ltd. surged 8.7 percent after the supplier of warehouse pallets reported profit and sales that topped analyst estimates.
Singapore, Korea
Singapore’s Straits Times Index gained 0.1 percent and India’s S&P/BSE Sensex Index rose 0.3 percent. South Korea’s Kospi index retreated 0.1 percent. New Zealand’s S&P/NZX 50 Index was little changed. Markets in Thailand and Sri Lanka are closed for holidays.
The Shanghai Composite Index rose 2 percent, on course for the highest closing level in a month, amid speculation the new securities regulator chairman will take steps to boost the world’s second-largest equity market. Hong Kong’s Hang Seng Index rose 1.1 percent and the Hang Seng China Enterprises Index, a gauge of mainland stocks listed in the city, gained 1.5 percent.
CSRC Boss
Xiao Gang, who had been chairman of the China Securities Regulatory Commission since March 2013, was replaced by Liu Shiyu after last summer’s rout wiped $5 trillion in market value and dented confidence among the nation’s 99 million individual investors. The government has had to step in to steady markets and restrict share sales after unchecked leverage drove an initial surge in local equities before a collapse in June last year.
Futures on the Standard & Poor’s 500 Index climbed 0.6 percent. The U.S. equities gauge ended Friday’s session little changed.
The pound dropped as much as 1.2 percent against the dollar after London Mayor Boris Johnson, a well-known political figure, said he’ll campaign for Britain’s exit from the EU in a June referendum.
Investors are awaiting the start of a Group of 20 meeting this week. Officials from the world’s biggest economies gather in Shanghai starting from Friday, with the weakening global-growth outlook expected to dominate the agenda.[Bloomberg]
FTSE 100 Outlook and Prediction
We have had a pretty decent bounce overnight as Australia and Asia have rallied, rising from 5915 to 5980 to set up the charts for what would appear to be a bullish start. We have the daily pivot at 5956 for initial support and if this level holds then I can see a climb to the 6040 area this morning. The bulls will be desperate to regain some ground above 6000 again, having relinquished that last week after bringing it up from 5500. The shorter time frames (10mins) are pointing to an initial dip as the moving averages cross over to bear, so it will be interesting too see if the early support does hold. The 2 hour chart has gone bearish at the moment, with resistance also showing at 6040, so I am thinking this week we get a bit of consolidation, dip to 5850ish at some point to set up a spring board for a push higher. I had mentioned that I was looking for 5400 as the low, but I think 5500 is it for the moment. We also have to see how the FTSE will react to the EU referendum news that came out over the weekend. Going to be an interesting vote that one. So, feeling for today is optimistic and therefore slightly bullish with eyes on 6040 if it get there to see what happens.