Good morning. The 6350 area held as decent support in the end, and the second rise from that area gained a lot more points than the first one! The bulls managed to take the FTSE back above 6400, though its dropped back overnight, and we have the top of the 10 day Bianca at 6447 for resistance. There is a feeling that longer term investors are buying the market on dips at the moment so from the initial early falls the FT100 picked up later in the day to finish moderately up. Banks were the main casualty along with house builders, the latter being hit by a broker downgrade for the sector. Oil and other commodity shares finished the day stronger on the back of stronger oil prices.The Standard & Poor’s 500 Index climbed on Tuesday to within 1 percent of its all-time high. The divi today is 5.24.
US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for its third day of advance, as commodity producers climbed amid renewed global appetite for riskier assets.
The MSCI Asia Pacific Index gained 0.6 percent to 134.28 as of 9:00 a.m. in Tokyo. The Standard & Poor’s 500 Index climbed on Tuesday to within 1 percent of its all-time high. U.S. stocks have reversed all of their losses since China shocked global markets by unexpectedly devaluing the yuan in August, as concern over the slowdown in Asia’s biggest economy abates and traders refocus on the outlook for central bank stimulus.
“We still have some uncertainties over when U.S. interest rates will start to climb but it seems the clouds of pessimism around China’s economy is starting to clear,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets Plc. “It’s unlikely we’ll see a hard landing in China. There’s been demonstrated commitment from authorities in China to underpin the economy. We’re certainly seeing good support for risk assets.”
Japan’s Topix index rose 1.3 percent as markets in Tokyo resumed trading following a holiday on Tuesday. Japan Post Holdings Co. and its banking and insurance units debut today in the world’s biggest initial public offering this year. South Korea’s Kospi index added 0.3 percent. Australia’s S&P/ASX 200 Index jumped 1.2 percent. New Zealand’s S&P NZX 50 Index rose 0.6 percent. Markets in Hong Kong and China have yet to start trading.
Chinese Stocks
Chinese stocks in Hong Kong rose for the first time in six days on Tuesday, with the Hang Seng China Enterprises Index climbing 0.4 percent. The H-shares gauge has rebounded from a September low as the government introduced more measures to boost growth amid the slowest economic expansion in a quarter of a century. The Shanghai Composite Index slipped 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The underlying U.S. equity gauge gained 0.3 percent on Tuesday to a three-month high as beaten-down commodity producers continued to pace the recovery from a third-quarter rout.
Traders are pricing in a 50 percent chance of liftoff at the Fed’s December meeting. Fed Chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed’s William Dudley are all scheduled to deliver remarks on Wednesday. [Bloomberg]
FTSE Outlook
Initially the 10 minute chart looks bearish as we have had a moving average cross overnight, setting up resistance at the 6404 area. There is also a rising 10 min channel with resistance at 6414, and with R1 at 6423 I think once again we will see an initial dip from this area. We are just at the top of the 10 day Raff at this level so the bulls might have a bit of a job to break through that, though there is still a chance that we see the top of the Bianca channels at 6447. We have a 5.24 divi later as well, though I don’t think that is sizeable enough to bring out many divi hunters, but bear it in mind if you hold a position on your platform when it is applied. At the moment the 30min moving averages are still bullish, with support at 6397 and then 6380, so any early bearish activity will need to break these two levels. Its always a little bit dubious when the S&P starts making all time highs as that will only last so long before we get a pullback, so don’t fall in love with the upside as they say.