Nasdaq 100 Falls Most In a Month, Nikkei 225 and Dangle Seng Could Drop

NASDAQ 100, NIKKEI 225, HANG SENG INDEX OUTLOOK:

• APAC shares retreated, tech shares dragged the Wall Avenue benchmarks decrease
• US stimulus talks confronted impasse over a enterprise legal responsibility defend and assist to state and native governments
• The US Greenback strengthened, risking additional pullback in threat belongings and metals. ECB assembly in focus

Tech Pullback, US Reduction Bundle, ECB Curiosity Charge Resolution, Asia-Pacific at Open:

The Nasdaq 100 index tumbled 2.1% in a single day as stalling US stimulus talks and a seemingly easy rollout of coronavirus vaccines inspired profit-taking exercise within the tech sector. The Dow Jones and S&P 500 index registered comparatively small losses, each falling from their document highs. The negotiation between Republicans and Democrats over the fiscal invoice confronted impasse over a enterprise legal responsibility defend and assist to state and native governments. Merchants are maybe taking this chance to unwind a few of the positions constructed on stimulus hopes earlier this month.

This got here together with fast climbing US Covid-19 instances, which hit 220okay on December 8th with whole infections surpassing 15.2 million. Beforehand, California reported a leap in Covid-linked ICU instances and surging hospitalizations after the Thanksgiving vacation, threatening an extension of lockdown measures. The US Meals and Drug Administration (FDA) will meet outdoors specialists on Thursday to debate whether or not to suggest a wider distribution of Pfizer’s vaccine after giving the inexperienced mild on emergency-use authorization on Tuesday. In the meantime, Canada grew to become the most recent main financial system to approve Pfizer’s vaccine.

Sentiment seems to have leaned in direction of the cautious facet because the US Greenback – a perceived haven foreign money – rebounded from a 2.5-year low. The VIX volatility index climbed to 23.Eight in a single day. Asia-Pacific equities could comply with bearish US lead decrease in the present day, with expertise sector extra inclined to a pullback.

DXY US Greenback Index

Chart from IG

On the macro entrance, foreign money merchants will carefully watch the ECB assembly later in the present day. The central financial institution is predicted to maintain rates of interest unchanged whereas rising the bond-purchasing program to cushion the affect introduced by one other pandemic wave. Except for that, UK GDP figures and US core inflation knowledge are additionally amongst prime occasions in the present day. Discover out extra on the DailyFX financial calendar.

Sector-wise, Four out of 9 Dow Jones sectors ended decrease, with half of the index’s constituents closing within the pink on Wednesday. Shopper discretionary (+0.63%) , communication providers (+0.33%%) and supplies (+0.20%) have been doing the heavy lifting, whereas info expertise (-1.65%) and power (-1.20%) have been among the many worst performers.

Dow Jones Sector Efficiency 09-12-2020

Supply: Bloomberg, DailyFX

Nasdaq 100 Technical Evaluation:

The Nasdaq 100 index seems to have hit the 76.4% Fibonacci extension stage of 12,620 and has since entered a consolidation part. A right away help stage could be discovered at 12,240, the place the 20-Day Easy Transferring Common (SMA) line and the 50% Fibonacci extension stage intercept. Breaking this stage could open the door for additional losses. The general development stays bullish-biased, though a technical correction appears to be underway.

Nasdaq 100 Index – Each day Chart

Nikkei 225 Index Technical Evaluation:

Technically, the Nikkei 225 index has probably damaged the decrease sure of its “Ascending Channel” (chart beneath) and has since entered a consolidative interval (highlighted in chart beneath). A right away help stage could be discovered at 26,350 – the 50% Fibonacci extension, whereas a direct resistance stage could be discovered at 27,000.

Nikkei 225 Index – Each day Chart

Dangle Seng Index Technical Evaluation:

Upward momentum seems to be fading for Dangle Seng Index (HSI), which has probably entered a consolidative part on November 30. The MACD indicator fashioned a “Dying Cross” and trended decrease since, reflecting bearish momentum. The index has additionally pierced beneath the center Bollinger Band line, pointing to a attainable development reversal.

Dangle Seng Index – Each day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter