Dow Jones Rebound Could Elevate APAC Shares, Alibaba Earnings Miss

DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.80%, +0.82% and +0.65% respectively
• The S&P 500 hit an all-time excessive amid earnings optimism and hopes for an US infrastructure invoice
• Alibaba posted decrease income for Q2, share worth plunged 3% throughout HK commerce

Dow Jones, Alibaba, Tencent, Asia-Pacific Noon Commerce:

Wall Road shares rebounded broadly on Tuesday, with the S&P 500 index hitting an all-time excessive. Sentiment was buoyed by strong US company earnings. Practically 89% of blue chip corporations have crushed forecasts to this point, marking the most effective reporting season in over a decade. In the meantime, the US Senate is attempting to cross a $1 trillion bipartisan infrastructure funding invoice by this week, which might revitalize America’s roads, bridges and mass-transit programs over the subsequent 5 years.

Asia-Pacific markets are buying and selling broadly increased following a optimistic lead, with Hong Kong and mainland Chinese language shares main the beneficial properties. The Dangle Seng Index climbed greater than 1% after Tencent – the index’s largest element – rebounded over 3% from deep losses yesterday. China’s state media criticized on-line gaming because the “non secular opium” for youngsters on Tuesday, spurring a brand new wave of issues a couple of wider crackdown on the tech sector and inflicting a 6% decline in Tencent’s share worth. Buyers seem like taking this as a chance to purchase the dips nonetheless, as Tencent has dropped virtually 40% from this yr’s excessive.

Alibaba – China’s main e-commerce service provider- reported a 5% YoY decline in web income for the second quarter. That is largely attributable to increased spending to develop its order-fulfillment providers. Expenditures on varied companies surged 169% YoY in the course of the quarter, squeezing revenue margins. Alibaba’s share worth erased some losses after dropping over 3% at open, suggesting that traders stay optimistic about its longer-term outlook.

Tencent (700 HK)

Wanting again to Tuesday’s shut, eight out of 9 Dow Jones sectors ended increased, with 83.3% of the index’s constituents closing within the inexperienced. Supplies (+1.65%), healthcare (+1.44%) and industrials (+1.26%) had been among the many greatest performers, whereas communication providers (-1.12%) trailed behind.

Dow Jones Sector Efficiency 03-08-2021

Supply: Bloomberg, DailyFX

Dow Jones Index Technical Evaluation

The Dow Jones index is difficult a direct resistance degree at 34,920 – the 200% Fibonacci extension. A profitable try would probably intensify near-term shopping for strain and open the door for additional upside potential. A failed attempt nonetheless, might kind a “Triple Prime” chart patten that’s bearish in nature. Bearish MACD divergence means that upward momentum could also be weakening.

Dow Jones Index – Day by day Chart

Nikkei 225 Index Technical Evaluation:

The Nikkei 225 index stays in a “Descending Channel” fashioned since February. The ground and ceiling of the channel could also be considered as fast help and resistance ranges respectively. The general pattern stays bearish-biased as urged by the downward-sloped SMA traces. The MACD indicator is trending under the impartial line, suggesting that upward momentum could also be weak.

Nikkei 225 Index – Day by day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index is difficult a key resistance degree at 7,500 – the 200% Fibonacci extension. The general pattern stays bullish-biased, as urged by the consecutive increased highs and better lows fashioned over the previous few months. The MACD indicator fashioned a bullish crossover and trended increased, suggesting that upward momentum is gaining traction.

ASX 200 Index – Day by day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part under or @margaretyjy on Twitte