ASX 200 index gives up early gains and turns lower despite the positive momentum in Wall Street, with Nasdaq and S&P 500 ending the Friday session in fresh record highs. Asian stocks finished to 29-month highs. Today is the last day of the second-quarter earnings reporting season. The Gross operating profits for Australian companies in the second quarter came in at 15%, beating the expectations of 1.2%.
Australia Inflation dropped to 0.1% in August from the previous 0.9%; the yearly reading came in at 1.3%. The Private sector Credit reported at -0.1% in July below the forecasts of 0.2%.
In China, Australia’s main trade partner, the manufacturing activity continues to improve. The Manufacturing PMI edged at 51, topping the expectations of 48.7 in August. The non-manufacturing PMI climbed at 55.2, beating the forecasts of 52.1 and above the July reading of 54.2.
Trade Tensions Between Australia and China Continues
News that China’s Commerce Ministry launched an investigation into alleged government subsidies of Australian wine imports. The ministry said that it is investigating complaints by China’s wine industry Association on 27 Aussie wine subsidy schemes.
ASX 200 Technical Analysis
ASX 200 is 0.22% lower at 6,060 as the strong resistance at 6,200 mark continues to cap the index. The 200-day moving average has proved a strong resistance during August. A correction is expected unless the index breaks above the critical 200-day SMA resistance.
Support for ASX 200 stands at 6,029 the 50-day moving average. A break below would attract more sellers targeting 5,927 the low from August 4. Next support would be met at 5,812 the 100-day moving average.