Australia: S&P/ASX 200 (.AXJO) shares up on financials, slowing virus, NZ hits record high

Australia: S&P/ASX 200 (.AXJO) shares up on financials, slowing virus, NZ hits record high

Australia: S&P/ASX 200 (.AXJO) shares up on financials, slowing virus, NZ hits record high

Australian shares advanced on Wednesday, powered by financial major Commonwealth Bank of Australia , and as investors drew relief from news that the spread of the coronavirus outbreak in China may be slowing and it may be over by April.

The S&P/ASX 200 index rose 0.4pc to 7,086.1 by 2352 GMT.

The index hit its highest level in nearly three weeks earlier in the session.

Top lender Commonwealth Bank of Australia posted a smaller-than-expected drop in half-year cash earnings, sending its shares more than 3pc higher to mark their highest since May 2017.

Wednesday’s gains are mainly driven by CBA results and the market would climb higher in the near-term as earnings results are going to be supportive of current valuation of heavyweight stocks like CBA, said Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Underpinning the positive sentiment, a Chinese senior medical adviser said the virus outbreak in the country would hit a peak this month, and the epidemic might be over by April.

The number of deaths in China’s central Hubei province rose by 94 to 1,068 as of Tuesday, while a further 1,638 new cases were detected in the province – the lowest since Jan. 31.

Financials stocks boosted the benchmark, with Commonwealth Bank pushing the sub-index to its highest level since Oct. 31 last year.

Meanwhile, biotech major CSL Ltd, which raised its full-year profit forecast, fell from a record high it scaled earlier in the session to trade 1.5pc lower.

Marcustoday’s Jennings attributed the move to investors booking profits after CSL’s “stellar run” so far this year. The stock has gained 18.1pc in 2020 as of Tuesday’s close.

Mining sector slipped, with heavyweights BHP Group  and Rio Tinto Ltd falling up to 0.5pc and 0.9pc, respectively.

“Investors are switching from resources into the banking sector following the CBA announcement,” added Jennings.

Vitamin maker Blackmores Ltd slumped as much as 23.4pc after the China-exposed firm said it expects profit to more than halve this year due to supply disruptions from the coronavirus outbreak.

Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index gained as much as 0.7pc to hit a record high briefly before the Reserve Bank of New Zealand held the official cash rate at 1pc, in line with a Reuters poll.

NZ-listed shares of Westpac Banking Corp advanced up to 0.5pc, while Fisher & Paykel Healthcare Corp hit a record high.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 7,249.54.

The projected lower bound is: 6,935.83.

The projected closing price is: 7,092.68.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 83.0792. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 61.03. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 13 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 113.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed up 32.900 at 7,088.200. Volume was 23% above average (neutral) and Bollinger Bands were 29% narrower than normal.

Open     High      Low     Close     Volume___
7,055.3007,098.6007,055.1007,088.200 692,657,472
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,010.15 6,886.02 6,675.34
Volatility: 12 15 14
Volume: 654,177,280 552,287,872 616,094,144

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

S&P/ASX 200 is currently 6.2% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .AXJO (mildly bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 23 periods.

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