Shanghai: SSE Composite Index (.SSEC) shares mostly higher, lockdown feud drags Tokyo lower
Shares were mostly higher in Asia on Thursday though Japan’s benchmark fell as local leaders sparred with Prime Minister Shinzo Abe’s government over measures to contain the coronavirus outbreak.
After a 3.4% overnight rally on Wall Street, markets advanced in Hong Kong, Sydney and Shanghai. Investors seem reassured by signs that deaths and infections may be nearing a peak or plateau in some of the world’s hardest-hit areas.
And a meeting of oil producers planned for Thursday has raised hopes energy companies might get some relief in the form of production cuts to help support crude prices amid collapsing demand.
Japan’s Nikkei 225 index lost 0.3%, to 19,298.64, after the central bank governor said the economy faces “extremely high” uncertainty over the likely impact of the pandemic.
That uncertainty was heightened by disagreement between leaders over just how quickly and far to extend precautions meant to contain a surge in coronavirus infections.
Abe’s spokesman said that after declaring a state of emergency for Tokyo and six other hard-hit areas on Tuesday, the government planned to see whether residents were complying with the entirely voluntary request to stay at home before deciding on whether or not to ask more businesses to close.
That ran counter to Tokyo Gov. Yuriko Koike’s efforts to get stronger compliance, since so far the requests appeared to have achieved only about half of the 70-80% social distancing Abe said he was aiming for.
The governor of Aichi, a prefecture not included in Abe’s state of emergency declaration and home to Toyota Motor Corp.’s headquarters, asked that it also be included. The region has reported dozens of police officers falling sick from the coronavirus.
Shares also fell in Taiwan, Malaysia and Indonesia.
But elsewhere in Asia, markets were mostly higher. Hong Kong’s Hang Seng added 0.5% to 24,100.09 and the Shanghai Composite index gained 0.5% to 2,829.30. In Australia, the S&P/ASX 200 picked up 2.4% to 5,331.10 and South Korea’s Kospi climbed 1% to 1,825.22. India’s Sensex surged 2.1% to 30,526.79.
Futures for the S&P 500 and the Dow industrials edged higher.
Recent upward swings in markets have dwarfed declines amid signs that deaths and infections may be nearing a peak or plateau in some of the world’s hardest-hit areas.
That’s led some investors to begin looking to the other side of the economic shutdown that is gripping the world as authorities try to slow the spread of the coronavirus. The S&P 500 has jumped nearly 23% in the last two and a half weeks, building on earlier gains driven by massive amounts of aid promised by governments and central banks for the economy and markets.
“Risk assets continued to rally on the perception that the global economy will open up again quicker than expected,” Stephen Innes of AxiCorp said in a commentary.
The prospect for progress in talks among oil producers was a big driver of Wednesday’s rally, analysts said.
Oil prices have been even more volatile than stocks recently as Russia and Saudi Arabia bicker over production levels as demand withers. Oil producers are set to meet on Thursday, and an announcement for production cuts to prop up the price of crude is possible.
“The icing on the cake, … a ‘good’ outcome for oil prices from the OPEC+ meeting, would be a global agreement to cut output … beyond OPEC and Russia, although demand concerns will persist,” Innes said.
Benchmark U.S. crude oil rose 82 cents to $25.92 per barrel in electronic trading on the New York Mercantile Exchange early Thursday. It gained $1.46, or 6.2%, to settle at $25.09 a barrel on Wednesday, recovering some of its 9.4% slide from the day before.
Brent crude oil, the international standard, rose 62 cents to $33.46 per barrel. It gained 97 cents, or 3%, to $32.84 a barrel in London.
In currency trading, the dollar fetched 108.91 Japanese yen, up from 108.84 yen on Wednesday. The euro sold for $1.0858, little changed from $1.0856.
Many analysts say they’re skeptical of the recent stock rally given how much uncertainty still remains. The death toll continues to rise, millions of people are still losing their jobs by the week and the economic pain is worldwide.
But Dr. Anthony Fauci, the top U.S. infectious diseases expert, raised hopes when he said the White House is working on plans to eventually reopen the country. President Donald Trump later said it “will be sooner rather than later.”
The S&P 500 climbed 3.4% to 2,749.98. The Dow Jones Industrial Average also rose 3.4%, to 23,433.57. The Nasdaq added 2.6% to 8,090.90.
Stocks that have been beaten down the most since the sell-off began in February helped lead the way, including energy companies, retailers and travel-related companies.
Shares of health insurers and other stocks got an extra boost after Bernie Sanders suspended his presidential campaign. Investors had been wary of Sanders’ proposal of “Medicare For All” and other plans that could have restricted profits.
Treasury yields, which signaled worries about the economic damage from the coronavirus outbreak earlier than the stock market, were relatively steady. The yield on the 10-year Treasury was at 0.75%, from 0.76% late Wednesday.
Nearly 1.5 million cases of COVID-19 have been confirmed around the world, with more than 432,000 of them in the United States. More than 88,000 people have died from the virus, while nearly 330,000 have recovered, according to a tally by Johns Hopkins University.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 2,987.02.
The projected lower bound is: 2,655.74.
The projected closing price is: 2,821.38.
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 31 white candles and 19 black candles for a net of 12 white candles.
A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 94.7022. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 50.35. 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 buy 45 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 139.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 11 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 7 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 10.535 at 2,825.904. Volume was 9% below average (neutral) and Bollinger Bands were 14% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,777.58 2,881.48 2,933.39
Volatility: 18 37 23
Volume: 23,210,072,064 30,821,922,816 21,035,692,032
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.
SSE COMPOSITE is currently 3.7% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .SSEC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 17 periods.