S&P 500 Hovers at Record High, Hang Seng and Nikkei 225 Eye Pullback

S&P 500, HANG SENG, NIKKEI 225, ASIA-PACIFIC MARKET OUTLOOK:

• The S&P 500 index closed marginally increased as tech gained, however two thirds of the shares fell
• Asia-Pacific indices look set to drag again barely from their current highs
• Southbound influx in HK by way of inventory connections fell for a second day, risking a pullback within the HSI

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S&P 500, Hold Seng, Earnings, Asia-Pacific Shares Outlook:

Asia-Pacific shares look set to open broadly decrease after Wall Street noticed a combined buying and selling session. The S&P 500 index edged marginally increased, led by heavy-weight info expertise (+1.32%), shopper discretionary (+0.55%) and communication companies (+0.26%), whereas two thirds of its constituents completed decrease. Buyers are maybe on the lookout for contemporary catalysts to help Wall Road’s record-breaking rally when inventory market valuations are near two-decade highs.

US earnings continued to ship constructive surprises, with 15 out of 19 S&P 500 firms beating market forecasts final night time (desk on the finish). Intel’s share worth fell 4.5% in aftermarket commerce regardless of posting a document income and higher-than-expected EPS. To date within the earnings season, greater than 85% of the blue chips have smashed analysts’ forecasts. Learn extra on my earnings outlook report.

S&P 500 Sector Efficiency 21-01-2021

Supply: Bloomberg, DailyFX

A combined US session could set a bitter tone for Asia-Pacific markets, with fairness futures pointing to a decrease begin throughout Japan, Australia, Hong Kong, Malaysia and India on Friday morning. Japan’s Nikkei 225 inventory market benchmark appears to be like set to open mildly decrease after gaining 0.82% on Thursday.

The Hold Seng Index (HSI) is dealing with some promoting stress because the index makes an attempt to problem a psychological resistance stage at 30,000. The HSI registered a whopping 15% acquire during the last month, propelled by substantial quantity of southbound influx by way of the Hong Kong-Shanghai and Hong Kong-Shenzhen inventory connections. It’s value noting that each day southbound influxhas fallentwo days in a row to HK$ 16,263 million from a document excessive of 26,592 million seen on January 19th, reflecting cooling urge for food from mainland traders for Hong Kong shares. Whole southbound flows contributed to round 30% HKEX’s each day turnover not too long ago.

Hold Seng Index vs. Each day Southbound Internet Circulation – 12 Months

Supply: Bloomberg, DailyFX

Australia’s ASX 200 Index opened 0.11% decrease amid a defensive buying and selling session. Healthcare (+1.99%), shopper discretionary (+1.25%) and shopper staples (+0.52%) have been main whereas power (-2.06%) and knowledge expertise (-1.71%) have been lagging.

On the macro entrance, UK retail gross sales and a string of Markit Manufacturing PMIs throughout the EU and US will likely be carefully eyed on Friday. Discover out extra from DailyFX calendar.

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S&P 500 Index Technical Evaluation:

Technically, the S&P 500 index prolonged its upward trajectory inside an “Ascending Channel” as highlighted within the chart under. The bull pattern is well-supported by its 20-Day Easy Shifting Common (SMA) line, albeit the higher ceiling of the channel could function a right away resistance. Assist and resistance ranges may be discovered at 3,893 (100% Fibonacci extension) and three,804 (76.4% Fibonacci extension) respectively.

S&P 500 Index – Each day Chart

Hold Seng Index Technical Evaluation:

The Hold Seng Index is using a powerful pattern and is about to problem a psychological resistance stage at 30,000. Breaching it might open the door for additional upside potential with an eye fixed on 30,933 – the 161.8% Fibonacci extension. A failed try, nevertheless, could result in a technical pullback to check a right away help stage at 29,038 – the 100% Fibonacci extension. The RSI indicator stretches past the overbought threshold of 70, reflecting sturdy upward momentum but additionally warns a few technical correction.

Hold Seng Index – Each day Chart

Nikkei 225 Index Technical Evaluation:

The Nikkei 225 index hit the 100% Fibonacci extension stage of 28,770 and has retraced barely since. The general pattern stays bullish as highlighted within the two “Ascending Channels” under, though a interval of consolidation could also be seen earlier than the index makes an attempt increased highs. A bearish MACD crossover could trace at short-term stress. Rapid help and resistance ranges may be discovered at 27,800 (76.4% Fibonacci extension) and 28,770 (100% Fibonacci extension) respectively.

Nikkei 225 Index – Each day Chart

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S&P 500 Earnings Calendar 21-22nd January 2021

Supply: Bloomberg

— Written by Margaret Yang, Strategist for DailyFX.com

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