Support 6145 6124 6078 6029 6012
Resistance 6165 6178 6180 6181 6195 6287
Good morning.
Market Summary for Wednesday 23rd March 2016
Another day where the market oscillated around the key 6200 area with any moves soon returning to this level.
It’s hard to see anyone trading heavily before Easter so we can expect a similar pattern today or possibly a drop down to the 6110 recent low.
Commodities were the weakest sector with a mix of companies to the upside including Kingfisher and Sky.
US & Asia Overnight from Bloomberg
- Japan equities fluctaute as Shanghai Composite heads for loss
- Fed’s Bullard latest policy maker to signal rates may rise
Asian stocks dropped for a second day as oil tumbled below $40 a barrel and investors weighed the direction of U.S. monetary policy.
The MSCI Asia Pacific Index fell 0.7 percent to 127.74 as of 11:34 a.m. in Hong Kong, heading for the lowest close in a week. U.S. shares retreated on Wednesday as Federal Reserve Bank of St. Louis President James Bullard joined a chorus of policy makers floating the prospect of an interest-rate hike as soon as April should the economic data warrant it.
“Fed officials this week reminded the market that they still want to move forward with the rate hikes,” Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion, said by phone. “Investors have been looking for a reason to pull back and this is one. Not surprising given the strong rebound that we’ve seen. Concerns remain about how sharp the slowdown is in China. You still have deflationary pressures and geopolitical risks.”
After halving its projection for rate increases this year to two — a shift that spurred global stock gains and weighed on the dollar — the Fed is back in the spotlight as its own officials start to tweak that rhetoric. China’s central bank chief is due to speak Thursday as traders in some parts of Asia wind down ahead of the Easter holiday.
Regional Gauges
China’s Shanghai Composite Index dropped 0.9 percent, heading for its biggest decline in two weeks, as some of the nation’s largest firms including Anhui Conch Cement Co. and PetroChina Co. reported slumping profits and smaller companies retreated after a benchmark gauge entered a bull market.
South Korea’s Kospi index dropped 0.3 percent. Australia’s S&P/ASX 200 Index lost 1.1 percent. Taiwan’s Taiex index slipped 0.5 percent and Singapore’s Straits Times Index declined 1.1 percent. Japan’s Topix index was down 0.1 percent, after swinging between a gain of 0.1 percent and losses of as much as 1.1 percent. New Zealand’s S&P/NZX 50 Index added 0.1 percent.
Mitsui & Co. tumbled 7.2 percent in Tokyo after the Japanese trading company booked more than $2 billion in impairment charges and forecast its first net loss in its modern history. Inpex Corp. dropped 4.1 percent, pacing losses among energy producers as crude oil futures extended declines. Australia & New Zealand Banking Group Ltd. slumped 5.7 percent in Sydney after saying bad debt charges will be higher than previously forecast as low commodity prices impact its resource-industry clients.
E-mini futures on the Standard & Poor’s 500 Index decreased 0.2 percent on Thursday. The U.S. equity benchmark index slipped 0.6 percent on Wednesday as energy producers declined amid the dollar’s longest rally in a month.
West Texas Intermediate crude declined 4 percent on Wednesday, the most in six weeks, as the dollar gained and a government report showed rising oil stockpiles kept supplies at the highest level in more than eight decades. The oil contract for May delivery fell as much as 0.9 percent on Thursday. [Bloomberg]
FTSE 100 Outlook and Prediction
As we have a shortened week this week and no trading tomorrow I don’t expect a whole heap of buying. The charts are showing pretty good resistance at the 6175/6180 area so if we get a bounce this morning off S1 to that level its worth shorting there for a run down to the recent low at 6110. The 2 hour chart is also looking bearish, as once again the bulls failed to break and hold above 6200. Its been a weird rubbish choppy sort of action recently on the FTSE so it will be good to get some direction going soon. I have a fairly simple plan for today which is to short that level, as we are breaking below the 10 day Bianca at 6165 first thing, which could be showing that the bears are starting to take back a bit of control. I still think we have come too far too fast on nothing much apart from stimulus, and yesterday we had the Fed’s Bullard talking rate rises in April. Could be seen as a reason to bank profits from the rise before the weekend and for today I would feel more comfortable being short rather than long. So, short the rallies today for me.