Good morning. Well yesterday turned out rather well and the pre market open long at 6684 turned into a real corker, with the rest eventually being closed with the trailing stop at 6750. We then dropped to almost the second support level at 6668 before another bounce, nearly getting 6710. If that 6670 area holds as support then, coupled with a large divi today of 21.7 points, should bring some buyers out (most definitely just before the close at least). The geopolitical situation is still in a bit of turmoil with UK and Germany threatening Russia with sanctions over Ukraine. Don’t think Putin will be too worried though!
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index rebounding after yesterday dropping the most in two weeks. Japanese shares swung between gains and losses as the central bank kept monetary policy unchanged.
The MSCI Asia Pacific Index climbed 0.3 percent to 137.96 as of 2:20 p.m. in Tokyo, paring gains of as much as 0.5 percent. The gauge fell from a six-week high yesterday. About five shares rose for every four that fell today.
“The BOJ will have to do more to support the economy,” said Tim Schroeders, a money manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Any sustainable improvement in the Japanese economy needs to be tackled with a combination of monetary easing and structural reforms.”
Japan’s Topix index added 0.3 percent, having swung between gains of 0.7 percent and losses of 0.1 percent. The BOJ kept its pledge to expand the monetary base at a pace of 60 trillion yen ($581 billion) to 70 trillion yen per year, the central bank said in a statement, in line with all but one of 34 economists surveyed byBloomberg News.
China’s Shanghai Composite Index was little changed. Hong Kong’s Hang Seng Index and South Korea’s Kospi Index rose 0.2 percent. Taiwan’s Taiex index gained 0.5 percent. Australia’s S&P/ASX 200 Index (AS51) was little changed, while New Zealand’s NZX 50 Index fell 0.3 percent.
China Credit
A report yesterday showed aggregate financing in China dropped to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, down from January’s record 2.58 trillion yuan and less than the 1.31 trillion yuan median estimate of analysts surveyed by Bloomberg News. Chinese exports slid the most since 2009 last month, according to government data released over the weekend.
“There’s concern China’s 7.5 percent growth target is going to be challenging when you see credit growth and exports declining,” Toby Lawson, head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA in Sydney, said by phone.
S&P Futures
Futures on the S&P 500 fell 0.1 percent today. The U.S. benchmark index lost 0.1 percent yesterday, retreating from a record high.
Ukraine began military drills as Russian forces tightened their hold on the Crimean peninsula and the Foreign Ministry in Moscow warned of “lawlessness” in the former Soviet republic’s eastern provinces.
FTSE Outlook
I am thinking a dip and rise again today, and with support at 6670 again. If that breaks then 6643 is the next level for the bears to defend. Today’s pivot is 6706 so with this slightly lacklustre bounce since 6670 so far I think a dip from that area before climbing later on. As mentioned above there is a large 21.7 divi today so there will most likely be some buying just before the bell. There is a very clear 30 minute channel in play today as you can see below, which also flags that resistance at 6720ish, so a short from there could work out quite well.