S&P 500 Hovers at File Excessive, Cling 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 through inventory connections fell for a second day, risking a pullback within the HSI

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

Asia-Pacific shares look set to open broadly decrease after Wall Avenue noticed a combined buying and selling session. The S&P 500 index edged marginally increased, led by heavy-weight data expertise (+1.32%), client discretionary (+0.55%) and communication providers (+0.26%), whereas two thirds of its constituents completed decrease. Traders are maybe in search of recent catalysts to assist Wall Avenue’s record-breaking rally when inventory market valuations are near two-decade highs.

US earnings continued to ship optimistic surprises, with 15 out of 19 S&P 500 corporations beating market forecasts final evening (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 might 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 seems set to open mildly decrease after gaining 0.82% on Thursday.

The Cling Seng Index (HSI) is going through some promoting strain 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 through the Hong Kong-Shanghai and Hong Kong-Shenzhen inventory connections. It’s value noting that day by 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 buyers for Hong Kong shares. Complete southbound flows contributed to round 30% HKEX’s day by day turnover lately.

Cling Seng Index vs. Every day Southbound Web Stream – 12 Months

Supply: Bloomberg, DailyFX

Australia’s ASX 200 Index opened 0.11% decrease amid a defensive buying and selling session. Healthcare (+1.99%), client discretionary (+1.25%) and client staples (+0.52%) have been main whereas vitality (-2.06%) and data 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 shall be carefully eyed on Friday. Discover out extra from DailyFX calendar.

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 Transferring Common (SMA) line, albeit the higher ceiling of the channel might function an instantaneous resistance. Assist and resistance ranges could be discovered at 3,893 (100% Fibonacci extension) and three,804 (76.4% Fibonacci extension) respectively.

S&P 500 Index – Every day Chart

Cling Seng Index Technical Evaluation:

The Cling Seng Index is driving a robust 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, nonetheless, might result in a technical pullback to check an instantaneous assist stage at 29,038 – the 100% Fibonacci extension. The RSI indicator stretches past the overbought threshold of 70, reflecting robust upward momentum but in addition warns a couple of technical correction.

Cling Seng Index – Every 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 might trace at short-term strain. Speedy assist and resistance ranges could be discovered at 27,800 (76.4% Fibonacci extension) and 28,770 (100% Fibonacci extension) respectively.

Nikkei 225 Index – Every day Chart

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

Supply: Bloomberg

— Written by Margaret Yang, Strategist for DailyFX.com

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