NASDAQ 100,HANG SENG INDEX, ASX 200 INDEX OUTLOOK:
- Dow Jones, S&P 500 and Nasdaq 100 closed +0.00%, -0.37%, and -0.84% respectively
- Technology stocks led the decline as investors mulled the probability of a 50bps rate hike in March
- Asia-Pacific markets look set to open mixed. Crude oil prices climbed to fresh 7-year highs
Nasdaq 100, Hang Seng Index, Crude Oil, Inflation Asia-Pacific at the Open:
US markets finished lower on Monday, with technology shares leading the decline. Meta (-5.14%), Alphabet (-2.85%) and Tesla (-1.73%) were among the worst performers in the Nasdaq 100 index. Investors mulled a much stronger-than-expected US jobs report on Friday, which may spur inflation concerns and urge the Fed to tighten monetary policy at an accelerated pace. The futures implied probability of a 50bps rate hike at the March FOMC meeting jumped to 33.7% following the release of the nonfarm payrolls report, according to CME’s FedWatch tool. The figure was only 8.5% a week ago.
Against this backdrop, the rate-sensitive tech sector looks set to underperform the broader market due to heightened hawkish bets and an uneven earnings season. The overall sentiment of global equities may be fragile as investors scrutinize Thursday’s US inflation rate, which is expected to hit a four-decade high of 7.3%. Given a tight labor market, strong wage growth and unprecedented monetary stimulus, inflation appears to be more ‘entrenched’ than expected, urging the Fed to take action at the next FOMC meeting to rein in price levels.
Besides, Brent crude oil prices surged to $92.93 per barrel, the highest level seen in more than 7 years due to pent-up demand and supply constraints. This may feed into inflationary pressures as base materials and energy prices increase, and this trend shows no sign of ebbing soon.
Top 10 Stocks Daily Performance in The Nasdaq 100
Source: Bloomberg, DailyFX
Asia-Pacific markets look set to open mixed following a tepid US session. Futures in Japan, Australia, South Korea and India are in the red, whereas those in mainland China, Hong Kong, Taiwan, Singapore, Malaysia, Thailand and Indonesia are in the green.
Bitcoin extended higher after Tesla filed to the SEC that it was holding $1.99 billion worth of the cryptocurrency at the end of 2021. This helped to revitalize investor confidence in the token and pushed prices to above its 50-day moving average for the first time since November 2021. Bitcoin is trading just beneath $44,000 at the moment of writing.
Looking ahead, China Caixin Composite and Service PMI data dominate the economic docket alongside a speech by ECB President Lagarde. Find out more from theDailyFX economic calendar.
Hong Kong’s Hang Seng Index (HSI) registered a small gain on Monday as mainland bourses traded higher after the weeklong CNY holiday. Authorities have recently shown a willingness to ease curbs on the property sector, bringing hopes that policymakers will also relax rules on the technology sector to cushion a slowing economy. Exchange data showed that HKD 1.40 billion have flowed to Hong Kong on Monday via stock connections, marking a 17th consecutive session of net inflow (chart below).
Southbound Flow vs. Hang Seng Index
Source: Bloomberg, DailyFX
Nasdaq 100 IndexTechnical Analysis
The Nasdaq 100 index reversed lower after bouncing from a key support level of 14,180, showing hesitance about where to go next. The formation of a “Hammer” candlestick pattern last week suggests that its near-term trend may be tilted to the downside. An immediate support level can be found at around 14,488 – the 78.6% Fibonacci extension. Failing to hold above this level would bring the next support level of 14,180 into focus. The MACD indicator formed a bullish crossover beneath the neutral midpoint, suggesting that a technical rebound may be underway, but the overall momentum remains weak.
Nasdaq 100 Index– Daily Chart
Chart created with TradingView
Hang Seng Index Technical Analysis:
The Hang Seng Index (HSI) breached above a “Falling Wedge” pattern from the upside. Prices have reversed lower to test the upper trendline for support, holding above which may pave the way for further upside potential. An immediate resistance level can be found at around 24,900 – the 127.2% Fibonacci extension. Breaching above this level may expose the next resistance level of 25,600. The MACD indicator is trending higher above the neutral midpoint, underscoring bullish momentum.
Hang Seng Index – Daily Chart
Chart created with TradingView
ASX 200 Index Technical Analysis:
The ASX 200 index breached below a range-bound zone between 7,200 to 7,500 as highlighted on the chart below, entering into a consolidative period. Prices have likely found some support at 6,920 and have since rebounded. The floor of the range has now become an immediate resistance level. The MACD indicator formed a bullish crossover beneath the neutral midpoint, suggesting that a technical rebound is underway, but the overall momentum remains weak.
ASX 200 Index – Daily Chart
Chart created with TradingView
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Comments section below or @margaretyjy on Twitter
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